<P> In its 40 years of existence, the Bank has faced many challenges, some a direct result of exogenous shocks, others because of the impact of domestic policies . When the Bank was established in 1964, Trinidad and Tobago was part of the sterling area which provided for full convertibility of the local currency into sterling . The Ministry of Finance administered exchange controls against other currencies . </P> <P> The late 1960s and early 1970s were characterized by great turmoil both at home and abroad . The external source of turmoil was linked to continuing concerns about the strength of sterling and the TT dollar / sterling peg . In November 1967, when the pound sterling was devalued, the TT dollar was adjusted by the same amount to maintain its sterling parity . In 1970, the administration of exchange controls was delegated to the Bank, sterling was subject to exchange controls and the TT dollar peg was shifted from the pound sterling to the US dollar at a rate of TT $2.40 per US dollar . The Defence Finance regulations of 1942 under which exchange controls had been administered was replaced by a new Exchange Control Act in 1970 . </P> <P> The domestic turmoil of the early 1970s came in the form of socio - political upheaval, and what came to be known as the Black Power Revolution . One outgrowth of this upheaval was the movement towards the localisation of commercial banks, initiated by the Government but with the Bank playing an important role . </P> <P> In the mid-1980s, the Bank faced a major threat to the financial system when oil prices slumped and the economy slipped into recession . Several non-bank financial institutions (NFIs) failed due to weak internal controls and excessive exposure to the real estate market . Initially, the Bank, in conjunction with the commercial banks, provided short term financial support . When it was clear that the problem was not one of liquidity but insolvency, the Bank moved to close down five of the NFIs . The crisis of the finance companies was to absorb a great deal of the energy of the Bank's leadership in the mid-1980s . </P>

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