Caribbean banks look forward to resolution of correspondent banking issue
Castries, St Lucia — The Caribbean Association of Banks (CAB) said it fully supports the prime minister of Antigua and Barbuda, Gaston Browne, in his remarks to the meeting of Caribbean Community (CARICOM) heads of government and US president, Barack Obama, on April 9 in Jamaica.
Browne highlighted a very real and grave threat to the Caribbean banking industry, an issue of concern, on which the CAB has been advocating.
“The unfair and unsubstantiated labelling of the Caribbean region as a high-risk area for financial services by some US organisations is resulting in the disturbing threat of loss of correspondent banking relationships to banks in the region,” the CAB said in a statement.
Correspondent banks use the risk rating of countries, in assessing the risk profile of banks, to determine whether to continue existing or establish new relationships. The present trend is that some correspondent banks have discontinued some of the services provided to regional banks and are also not establishing new relationships particularly with small size financial institutions.
CAB highlighted that correspondent banking relationships are critical in enabling key economic and financial transactions, such as remittances, foreign direct investments and international trade in goods and services, which constitute some of the key drivers for sustaining the region’s growth and development.
“Consequently, the loss of these vital relationships can render our region unbankable and ultimately destabilize all sectors of our economies,” CAB said.
CAB considers this issue to be a threat to national security for the various islands in the region.
“We are pleased to note that President Barack Obama reiterated at his meeting with the Young Leaders of the Americas, that he has committed to ‘examine the complaints and go through, in very concrete ways, where our concerns are and how our governments can work together’,” CAB said.
CAB said it will remain vigilant on this serious matter and will continue to collaborate with CARICOM and other stakeholders towards a resolution.
CAB is a community of banks and other financial institutions in the Caribbean/CARICOM region, which provides opportunities for discussion on issues impacting the regional banking/financial services community as well as for the sharing of experiences and networking. CAB is an organization dedicated to the advocacy of national and institutional adherence to anti-money laundering and combating the financing of terrorism (AML/CFT). It recommends and supports full compliance with the AML/CFT standards in order to protect all financial systems, within the region, from ongoing money laundering and terrorist financing risks offering ongoing training and education for its members.