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CARICOM Meeting Big On Correspondent Bank De-Risking
posted (February 17, 2016)

But, the biggest issue facing the CARICOM Nations right now is the loss of correspondent banking relationships. As has been widely reported, this phenomenon called de-risking is a result of the US crackdown on money laundering and the financing of terrorism. That has caused the large US Banks to cut off their relations with the indigenous banks of the Caribbean.

It's a widening crisis, and over the last three days, the CARICOM heads of government have discussed the problem and possible solutions at length. Today, the Prime Minister shared with us what the conference of leaders has decided on to deal with the de-risking threat:

Hon. Dean Barrow, Prime Minister

"On correspondent banking, we're great to the appointment of a high level advocacy group to be led by the Prime Minister of Antigua and Barbuda; the chair of the finance minister committee we had earlier set up. This group will be charged with the responsibility to represent the interest of the region in addressing this issue including an approach to the UN and the WTO. We're also talking about engaging directly with the regulators, particularly in the US and with congress, certainly with as many congressional leaders as the team will be able to interface with."

"There is the question of sensitization, there is a question of mobilization, there is the question of our thinking that going at it in this way will raise the profile of the issue to an extent that it cannot be side step and it will force all the players particularly in the United States to come together to help us reach a solution. The mission will also talk to correspondent banks in the same way as Belize is an individual country has been attempting to do. We recognize that the conundrum of the correspondent banks not wanting to assume the burden of the regulatory requirements given that the returns from our business are fairly small is something that we have to address."

"One of the things we've talked about is the possibility of perhaps getting insurance that could see us then be in a position to pay the fines that would be leaved against the correspondent banks if they get into trouble because of some transaction with us. There's also talk that we might even offer to the US that we be fined rather but I don't see how that would work and jurisdictionally legally I don't think there would be some problem with that."

That's only a small list of the ideas that were tabled at the 3 day session, and the Prime Minister also added that the CARICOM nations have even considered the idea to pool resources and open a bank in the US with which they will then be able to correspond:

Hon. Dean Barrow, Prime Minister

"If you look at the paper and the list of recommendations and all that we will be doing, you'd realise that time simply not allow us to list each in turn. One such is again the possibility of our coming together and we're going to get help from the CDB to look at the feasibility of this, coming together and chartering our own bank in the United States to serve as a correspondent bank. Again it's a longer term solution but it's just to make the point that there is a full panoply, we're going to pursue the entire gamut of options that are possibly open to us."

Reporter

"Prime Minister of Antigua and Barbuda told a local television audience this morning that some of you as heads discern that there may be something else in the pot from somewhere else on this issue. He said he didn't want to say exactly what that suspicion is. Are you in a position to say?"

Hon. Dean Barrow, Prime Minister

"When they say to me there's not a problem with your jurisdictions per-say I have to feel that they're telling the truth and that it really is just a question of the correspondent banks not thinking that it is in their interest to have to assume the sort of transactional weight that entering into these correspondent relationships brings with it."

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