So, while the Prime Minister and a team of Banking technocrats are scheduled to visit Washington DC, how exactly does he intend to convince the US officials to intervene with the de-risking problems?
Well, he told us after the House Debate that it's a very complex problem with a vicious cycle. As viewers are aware, the reason that the Tier 1 banks have cut that corresponding banking relationship with Belize and other Caribbean Nations is that it will cost them much more money to comply with the stiffer regulations which are in place to combat money laundering and terrorist financing. When compared to the revenue that they will make to do business with Belizean banks, they end up losing.
Finance Minister Barrow told us that if the US bankers and Financial regulators cannot come to an agreement, the Belizean banks will have to start fostering corresponding banking relationships with smaller American banks:
Hon. Dean Barrow, Prime Minister
"It's a hard problem to sort out, because the US Treasury says to us well, we've said to the banks that we would like to continue to see you do business in jurisdictions like Belize. They have an interest in prosperity in stability in Belize. They have an interest in security in Belize and of course if you are going to collapse a country's trading relation - and that would be the end point if this thing gets worse. It's going to be Armageddon almost for us. But that's not going to help the United States and because it's a regional thing - they who were in their back yard Central America is a foremost security preoccupation of the United States. So the officials there cannot want to see what has been happening, continue to happen. But they therefore say to the big banks no man we would like to see you continue and the big banks say fine - ease the regularity burden and they say but we can't do that. So it's a vicious circle. But we are going to be aiming now at trying to engage in these new relationships with smaller banks for who it will not be as onerous, for who it would rather make more economic sense to do business in Belize since they are not so big as to be able to simply turn up their nose at business in Belize and decide that it's not worth it because of the regularity burden."
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