The Central Bank has released its latest **Quarterly Economic Review**, highlighting information on monetary and economic developments.

**Financial Sector Contributions**

Also included is its annual report on the *”Gross Economic Contribution of The Financial Sector in The Bahamas (2007)”*. The 2007 survey highlights the sector’s continuing significance to the local economy. Banking sector activities during 2007 pointed to increased outlays for both domestic and international segments, alongside employment gains. Similar trends were noted for other non-bank financial sector institutions.

The Central Bank points out that regulatory and legislative efforts continued to be geared towards increasing the sector’s competitiveness and soundness by ensuring compliance with international standards and best practices.

Of particular note:

• The banking sector, one of the most important pillars within the local economy, featured sustained employment and spending growth, combined with increased capital investments.

• Of the 245 banks and trusts licensees, more than three quarters (214) had a physical presence in the jurisdiction; the remaining 31, which are mainly G-8 branches, operated under managed arrangements approved by the Central Bank, and consistent with international best practices.

• In line with the overall growth in the sector, the asset holdings of international banks and trust companies maintained an upward trajectory, reaching $351.2 billion.

• On the domestic side, banks’ assets strengthened to $8.4 billion.

• The total value of fiduciary assets under management contracted by an estimated 11.6% ($33.2 billion) to $254.1 billion.

• Buoyed by sustained growth in the financial sector, the banking industry’s workforce grew by 5.6% (261) to 4,923. Growth in the number of expatriate workers slackened to 7.8% (23) to 317 at the end of 2007.

• The share of expatriate and Bahamian workers within the total workforce stabilized at 6.4% and 93.6%, respectively.

• Higher operational and capital expenses elevated banks’ total expenditures by 2.2% ($10.2 million) to $478.3 million. Operational expenditures accounted for approximately 94.5% of total spending, rising to $451.9 million; Government fees advanced by 3.5% to $18.7 million, attributed primarily to gains in licensing expenses (16.1%), stamp duties (106.6%) and real property taxes (32.3%);

• The average annual salary paid to employees was slightly higher by 0.7% at $48,250. In the non-Bahamians component, average salary level grew by 5.8% to $107,959, whereas Bahamian employees registered a modest fall-off of 0.3% to $44,141.

• Training outlays grew by 11.2% to a six year high of $3.1 million.

**Other Financial Sector Activities**

The latest information available for the **insurance industry** suggests that the total expenditure level increased by 11.5% to $129.9 million; employment in the sector firmed, on a yearly basis, by 83 persons to 1,474.

**Credit Union** assets gained $20 million to $236.0 million in 2007. Employment increased marginally by 4 (3.8%) to 110 persons, and average salaries for the industry were estimated at $26,555 per worker.

The number of active **investment funds** under management grew by 59 (8.2%) over the year to 782. Growth in assets under management surged by US$92.9 billion to $297.6 billion. By end-2007, the number of investment fund administrators had increased by 2 to 65.

The Bahamas International Securities Exchange **(BISX)** All Share Index rose by 23.2% to 2,066.75 points in 2007 and the Fidelity Capital Market Index **(FINDEX)**, which reports on the over-the-counter market trading, was boosted by 26.4% to 938.3 points. The 24.3% gain in market capitalization to $3.9 billion surpassed the 20.8% year-earlier advance. Meanwhile, the trading volume of shares declined by 9.2% to 4.8 million, and the value fell by 1.6% to $28.3 million; whereas the number of publicly traded companies remained at 19.

In other **capital market developments**, two new Bahamas Depository Receipt (BDR) products were offered to the public, following the Central Bank’s earlier Exchange Control liberalization measures.