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CARICOM Leaders tackle financial problems of US banks de-risking Print E-mail
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Friday, 19 February 2016 00:00

headline picture.jpg - 123.97 KbBy now, Belizeans may be very familiar with the current threat to the economy caused by the loss of correspondent banking relationships between local banks and the Tier 1 American Banks. Readers may be aware that this issue is one that the entire Caribbean Community faces collectively. That’s abecause these large banks do not view the business it does with the Caribbean Countries as beneficial to offset the risk of running afoul of the stricter enforcement of global regulatory standards to combat money laundering and terrorist financing.

That was a major topic discussed at the Twenty-Seventh Inter-Sessional Meeting of The Conference of Heads of Government of CARICOM, which was held in Placencia. CARICOM which is being chaired in the interim by Prime Minister Dean Barrow, has come up with a comprehensive and exhaustive plan to try to address it, since member states like Montserrat are in trouble of being de-linked from the global financial network.

Prime Minister Barrow, and Secretary General Irwin LaRocque discussed that action plan perfected over the 3-day discussion with the other Prime Ministers of CARICOM. First of All, there will be a high-level advocacy group to be led by the Prime Minister of Antigua and Barbuda, Gaston Browne. He was appointed as the Chair of the Finance Ministers’ Committee, which set up earlier before the meeting. They will be charged with the responsibility of representing the interests of the Caribbean Region on this issue. That will include an approach to the United Nations and the World Trade Organizations, and the financial regulators in the United States, as well as the leaders of the United States Congress. This team will work to sensitize these organizations and authorities on the very real threat that de-risking poses to CARICOM because these US banks are terminating their correspondent banking relations with the indigenous banks of the Caribbean.

The idea is to raise the profile of the issue to these different bodies and authorities so that the effect that it is having on the CARICOM economies cannot be ignored any longer. This advocacy mission will also talk to correspondent banks in the same way that Belize has done to try to make connections with new correspondent banks, and also to make the case to existing correspondent banks that termination might not be the only option available to them.

Apart from this mission, the Prime Ministers have considered the possibility of getting some sort of insurance set up to assist these American correspondent banks with the fines they could face if tainted money from the Caribbean is ever found to have entered their financial transactions. That would hopefully make doing business more attractive since they stand to be fined millions by the regulators if found guilty. There was even the idea tabled that the US regulators might fine the country that the tainted money originated from, but Prime Minister Barrow told the press that he can see where that might not work legally, since there is no real jurisdiction that the US would have over the Caribbean Nations. A more long-term plan, according to Prime Minister Barrow, is that the Caribbean Nations might pool resources together and establish a bank in the United States just so that the CARICOM Nations could correspond with that bank, and allow for transactions between the Caribbean and the US to continue. According to Prime Minister Barrow, the discussions were almost all-exhaustive, and there are a number of ideas tabled which he did not reveal to the press due to time.

Last Updated on Friday, 19 February 2016 14:42