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The census of 1943 listed the main
industries of the Cayman Islands as
seamen, agriculture, services,
construction and fishing and the
total number of persons employed as
2,531. By 1960 this figure had grown
to 3,145 with little change in
occupations. However, during that
time the seeds had been planted for
the Islands' transformation into one
of the largest financial centers in
the world. In 1948 a weekly seaplane
service was established, and in 1950
the first hotel, Bay View Hotel, was
completed on the west coast of Grand
Cayman. This was followed in 1951 by
the completion of two additional
hotels, Galleon Beach on the now
famous Seven Mile Beach and Sea View
Hotel, still operating as a hotel,
restaurant and dive resort on the
west coast. In 1952 the only airport
on the island, Owen Roberts
International Airport (named in
memory of the aviator of the first
passenger sea plane, who died when
it crashed at Kingston's
international airport) was opened.
The first commercial bank, Barclays
Bank, opened a branch in George Town
the following year, 1953. The
island's airline, Cayman Airways,
was formed in 1968 with the purchase
of 51% of the shares by the Cayman
Islands Government from Cayman Brac
Airways, with LACSA, the Costa Rican
airline, holding the remaining 49%
of shares. Today Cayman Airways is
owned wholly by the Government of
the Cayman Islands. In 1960 the
Companies Registry function was
initiated under the Companies Law,
The second commercial bank, The
Royal Bank of Canada, was opened in
1963, and followed by Canadian
Imperial Bank of Commerce the
following year. In 1965 a
telecommunications franchise was
awarded to Cable & Wireless and by
1967 the link by telephone to the
rest of the world was complete.
Today there are numerous licensees
providing telecommunication services
on the island. All are regulated by
the Information and Communications
Technology Authority. The first move
in the establishment of the
financial industry came with the
enactment of The Banks and Trust
Companies Regulations Law in 1966.
During the same year the Cayman
Islands Tourist Board was
established, followed eventually by
the opening of offices in Miami,
Florida, and New York, to promote
tourism in the islands. Another
major event spearheaded in January
of the same year was the
establishment of the Mosquito
Research and Control Unit (MRCU)
with development aid from the United
Kingdom. The effectiveness of the
MRCU under the leadership of its
founder and director, Dr. M. E. C.
Giglioli, O.B.E. contributed to the
level of development in the islands.
In 1971 the Currency Law was passed,
and a Board of Commissioners of
Currency established to pave the way
for the introduction of Cayman's own
currency. On 1 May 1972, the
Currency Board commenced operations
with the new issue. Prior to 1 May,
currency in the Cayman Islands had
traditionally been supplied by
Jamaica, and after its independence
in 1962 the Jamaican pound,
decimalized in 1968, continued,
until 1972, to be the only legal
tender in the islands. With the
rapid progress of the Cayman
Islands' economy, especially the
growth of the tourism industry and
the growth of offshore financial
services, the recommendation for the
introduction of the Cayman dollar
was accepted by Her Majesty. The
Cayman dollar is backed over 100% by
external reserves and aligned to the
US dollar; this guarantees the
stability of the currency.
Diversification of the financial
industry was achieved in 1979 with
the introduction of the Insurance
Law. This facilitated the formation
of the captive insurance industry in
Cayman.
Within the government, the
supervision of the banking and
insurance sectors was handled by
separate departments until 1992 when
they were brought together under one
supervisory authority, known as the
Financial Services Supervision
Department (FSSD). Recognizing the
worldwide trend and phenomenal
growth area in mutual funds, the
Cayman Islands enacted its Mutual
Fund Law in 1993. The primary
objective of the Law is to provide
legislation for flexible and
effective regulation to a
fast-growing sector with widespread
implications for the financial
industry and position the Cayman
Islands as one of the world's
leading international financial
centers. Cayman had tended to
attract institutional and
sophisticated high net worth
investors, and the Law aims to
ensure that only those with sound
reputations and appropriate
expertise are permitted to establish
and administer mutual funds in the
Cayman Islands. The responsibility
for ensuring institutions are
adhering to the Law was given to the
FSSD in 1993. In 1996, The Cayman
Islands Monetary Authority was
established as a body corporate
under The Monetary Authority Law,
and was brought into existence on 1
January, 1997. The Authority is the
amalgamation of the Currency Board
and the Financial Services
Supervision Department. The
amalgamation provides a central body
of expertise, which is of benefit in
guiding the ongoing development of
the financial industry, and, more
importantly, is in line with
international practice.
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