Banks at the heart of Cuba's existential battle for reform

Eric Ellis

September 21, 2016

Cuba’s return to the international community will be long, complex and fraught with contradictions – not least in financial services. Reform remains a dirty word in a system where banking services for the masses are non-existent. The authorities talk a good game about attracting foreign investment – but how will they attract capital when the central bank won’t even discuss what reserves it holds?

Illustration: Britt Spencer

"We don’t have banks in Cuba!”

The taxi driver helming a splendid 1957 Pontiac Pathfinder clasico off the taxi rank at Havana’s Hotel Nacional snorts with scorn. Euromoney has asked him to drive us to a rare meeting at the Banco Central de Cuba (BCC), one of his country’s most important institutions. But the cabbie neither knows what a central bank is, nor where his country’s own is located.

Euromoney tells him the address, in Havana’s crumbling old town, along what was once Cuba’s raffish version of Wall Street at a time when his car arrived on this famously feisty island. He knows the street, but that’s all. “Are you sure it’s a bank?” he asks.

It’s a reasonable question. Fidel Castro’s communist command economy advantages its ruling military elite but pays most of its workers around $25 to $30 a month. Though five years into an erratic embrace of free-market reforms of their sclerotic Soviet-styled economy, most Cubans don’t yet have much call – or money – for banking services.