De-risking to be discussed at CARICOM Heads of Government Meeting
Eastern Caribbean Central Bank is pursuing discussions on de-risking and correspondent banking relations, growing problems for financial institutions in the Caribbean.
Timothy Antoine, governor of the ECCB, said his bank is in discussions with U.S. authorities on potential fallout the region can face because of correspondent banking relations. Since passage of the FATCA and other laws designed to control laundering and terrorism, financial institutions in the United States have grown sceptical as they see the Caribbean as a potential risk.
Other banks with branches in member states have pulled out or found it difficult to transact business, especially wiring funds through offshore banks, Mr. Antoine said.
Speaking with The Observer, Antoine said some commercial banks in the region are seeking alternative methods to correct the problem. This includes negotiating with service providers or other institutions in order to provide service that benefit everyone involved.
“At the regional and international levels, we are engaging all our partners, including U.S. regulators, the United States Government and international standard setting bodies like the Financial Action Task Force, Global Forum and the Caribbean Financial Action Task Force on how we can ensure consistency of treatment and avoidance of unilateral actions by countries that do not understand what the Caribbean has done with respect to money laundering,” the governor said.
He pointed out that regional governmental leaders are discussing a way forward on the pressing issue. He also said the topic of de-risking would be taken up at the CARICOM heads of government meeting in Georgetown, Guyana next month. He added that he and his deputy Trevor Brathwaite are in intense discussions with key players.
He said, “The Deputy Governor was in Washington D.C. a week and a half ago as part of that discussion. I was in Jamaica for a meeting of Central Bank governors around the same time for discussion on this same issue. We are very much engaged.
“Gov. Warrell in Barbados has been very much engaged in international discussions with the Financial Stability Board. Caribbean governors have prepared a report to send to the CARICOM heads of government which will meet in early July in Guyana.’
The issue of de-risking has chilling effects for all service sectors in the region, according to leading economists. Concerns have been raised about wiring funds that can affect international students as well as regional students.