The Bank was the brainchild of Governor Rexford Guy Tugwell, who signed Law 253 of May 13, 1942, creating the institution in charge of economic development for the Government of Puerto Rico.

A subsequent law in 1945 expanded its responsibilities to include serving as the fiscal agent for, and financial advisor of, the government of Puerto Rico.

The highly centralized government structure set up by Tugwell, one of President Franklin Delano Roosevelt's Brain Trusters required such a fiscal agent, contrary to the model followed by most states, in which each agency and political subdivision is responsible for issuing its own bonds.

[3] During its formative years, the GDB helped financially structure the Puerto Rico Water Resources Authority, the new publicly owned electric company that generated much of its power from a hydroelectric system.

The GDB is in the process of winding down its operations in an orderly fashion under Title VI of the Puerto Rico Oversight, Management, and Economic Stability Act, Publ.