CAB looks forward to resolution on correspondent banking relations

A. Browne in his remarks to the meeting of CARICOM Heads and the President of the United States Mr Barack Obama on Thursday 9th April in Jamaica.

The Honourable Gaston 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.

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.

The CAB wishes to highlight 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. The 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”.

The CAB will remain vigilant on this serious matter and will continue to collaborate with CARICOM and other stakeholders towards a resolution.

 

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