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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Caribbean countries caught in crossfire of U.S. crackdown on illicit money flow

BELIZE CITY, Belize – Burdened by chronic back pain, Belize Prime Minister Dean Barrow avoids traveling abroad, his colleagues say. But in January, he flew to Washington and visited one government agency after another on a singular mission: reconnecting his country to the U.S. financial system.
A U.S.-educated lawyer, Barrow made his case before agencies with chief oversight of American banks, including the Federal Deposit Insurance Corporation and the U.S. Treasury’s Office of the Comptroller of the Currency.

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Jamaica in Compliance with Intl. Banking Standards – Foreign Minister

Minister of Foreign Affairs and Foreign Trade, Senator the Hon. Kamina Johnson-Smith, says the country has strengthened its financial oversight and regulatory frameworks to remain in compliance with international banking standards.

“Given the severity of the challenge of de-risking by international banks, the Government has accorded the highest priority to this matter,” the Minister emphasised.

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