Posted: Tuesday, February 16th, 2016. 4:31 p.m. CST
By BBN Staff: Prime Minister Dean Barrow, who has been at the helm of the ‘de-risking’ issue in the region, again addressed the issue and sounded the alarm for dealing with the matter urgently, in front of his colleagues at the 27th Inter-Sessional Meeting of the Conference of Heads of Government of CARICOM in Placencia.
The threats to the region’s banking sector via the trend of de-risking could have “cataclysmic ramifications” for the Caribbean, and a “relentless” campaign must be waged against it, Barrow, who also serves as Chairman of CARICOM, warned on Monday.
During his opening address Barrow focused much of his remarks on the issue, highlighting what it means for countries in the region.
The matter is a key agenda item of the two-day summit, and a meeting of Finance Ministers was held earlier on Monday to craft a regional response. A Committee of Ministers of Finance on Correspondent Banking, chaired by Antigua and Barbuda’s Prime Minister and Minister of Finance Gaston Browne will lead the response to this issue.
The Committee is supported by leading Regional institutions including the Committee of Central Bank Governors (CCBG), the Caribbean Association of Banks (CAB) and the Caribbean Financial Action Task Force (CFATF).
Barrow briefed his colleagues on his recent visit to Washington D.C. where he met with bank regulators who assured him the de-risking is not a result of poor anti-money laundering/counter terrorism financing (AML/CTF) efforts.
But while he reported receiving sympathy, he pointed out that regulators have provided only an undertaking to indicate to their banks that Regional jurisdictions “have done and are doing everything we can to be fully AML/CFT compliant; and that there was therefore, in principle, no objection to those banks doing business with us”. The US regulators, he added, placed the matter squarely at the feet of sovereign US banks.
One of the suggestions Prime Minister Barrow put forward for consideration on Monday evening, was for respective country banks to get together across jurisdictions and, as a bloc, approach target banks in the United States for pooled correspondent services. It is his view that the region should be able to leverage the critical mass needed to make its business volume worthwhile in terms of risk/reward equation.
“Meantime our campaign, and I speak now of CARICOM, continues. And it cannot be other than relentless in the face of the possible correspondent banking Armageddon that we face. It is therefore a matter that looms extremely large on our agenda over the next two days, and has already been the subject of a dedicated Finance Ministers meeting this morning,” he told the ceremony.
CARICOM Secretary-General, Ambassador Irwin LaRocque, who made remarks at the ceremony, also addressed the correspondent banking relationship issue and referred to it as an immediate existential threat. The Caribbean, he pointed out, was “unarguably one of those most adversely affected by these de-risking strategies and our people have already begun to feel the consequences of such arbitrary decisions”. He sought collective action to deal with matter.
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