OECS plan to tackle de-risking by forming Single Compliance Department

The Organisation of Eastern Caribbean States (OECS) is forming a Single Compliance Department to tackle the issues of de-risking and correspondent banking.

Outgoing Chairman of the Caribbean Community (CARICOM), St Lucian Prime Minister Allen Chastanet indicated that the OECS have “moved the needle on de-risking” in the region. During his outgoing address as CARICOM Chair at the 31st Intersessional Meeting of the Conference of Heads of Government of CARICOM in Barbados, Chastanet pinpointed the negative consequences of severed correspondent banking relations on Caribbean states.

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Address by Saint Lucia’s Prime Minister Honourable Allen M. Chastanet Outgoing Chairman of the Caribbean Community at the 31st Inter-Sessional Meeting of the Conference of Heads of Government of the Caribbean Community on 18th February 2020

IT was a great honour for me over the past six months to have held the chairmanship of the Caribbean Community. Given that I am still virtually new to the scene in terms of political pedigree, the role allowed me to follow closer and to be more deeply involved in, the tremendous strides which this Community continues to make on behalf of our people.

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De-Risking in the Caribbean: Which Solutions Lead to Improved Relations Between Banks?

While global correspondent banks’ motives for de-risking are unclear, what is clear is the current effect of terminations, restrictions, and sanctions on regional financial payments and settlements systems. The region comprises small, open economies that rely on international payments systems to facilitate trade flows, remittances, foreign direct investments, and credit card settlements; any disruption to this will be destabilizing.

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Jamaica Leading Talks on Correspondent Banking Issue

Minister of Finance and the Public Service, Hon. Audley Shaw, says the Government continues to lead discussions in order to counter the threat of international correspondent banks cutting ties with local financial institutions.

“We are leading the way… to make sure that we have financial inclusion on a credible, transparent basis as we build a formal economy,” he said.

The Minister was addressing the final day of the fifth annual Anti-Money Laundering/Counter-Financing of Terrorism (AML/CFT) Conference at The Jamaica Pegasus hotel today (October 11).

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Banking: Is the US making a stick to beat its own back?

Caribbean governments have rightly focused on the severe consequences for their countries of the withdrawal of correspondent banking relations from regional banks by international banks, particularly those located in the US. But there will also be serious consequences for other parts of the world, particularly the US, if the current troubling trend remains unchecked.

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WASHINGTON, DC., OCTOBER 7, 2016 - “A recent World Bank study has revealed that the Caribbean appeared to be the region most severely affected by the de-risking strategy.” This is the word from Jamaica's Finance Minister Audley Shaw as he addressed the IMF/World Bank Annual meeting held in Washington this week.

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De-Risking Could Affect Caribbean People’s Livelihood

The Caribbean Association of Banks (CAB) said that unless a solution can be found to the de-risking of regional financial institutions engaged in correspondent banking relationships, the livelihood of the region 's people will be in danger.

Supporting observations by International Monetary Fund (IMF) Managing Director Christine Lagarde, the CAB quoted her as saying that "it is a collective action problem that calls for a collective solution".

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