A new approach is being taken to address the threat of bank de-risking, according to the Chairman of the Committee of Caricom Finance Ministers on Correspondent Banking, Prime Minister Gaston Browne.

Faced with costly new anti-money laundering and anti-terrorism regulations, many US banks are cutting ties with banks in the region, deeming their business unworthy of the cost of doing business. Without such relationships, cross border or cross currency transactions involving goods or services become impossible.

“We are proposing the establishment of a global forum here in the Caribbean to bring the various stakeholders together; correspondent banks, respondent banks, the regulators, policy makers, NGOs to include charities and foundations which have difficulty in moving funds,” Browne said.

A year after being appointed the Caricom lead on the issue, Browne said the risks remain real.

“It is a serious risk, an existential risk not only to Antigua & Barbuda, but to other Caribbean countries. It has implications for trade, for investments. It has humanitarian implications as individuals find it more difficult to remit funds to their loved ones in the Caribbean, many of whom are very vulnerable individuals. It has implications for employment and poverty,” Browne said.

The prime minister, who is also the minister of finance, said the issue is having a more significant impact on locally owned banks than regional ones.

“It’s also an issue about competition, because what is happening is there is a disproportionate effect on Caribbean institutions, especially the indigenous banks. They are the ones who are facing the brunt of de-risking,” Browne said.

http://antiguaobserver.com/caricom-to-take-new-approach-on-de-risking/