Staff Writer
Correspondent Banking remains on the front burner for a number of local commercial banks and it may soon hit those institutions very hard, according to Ambassador of St. Kitts and Nevis to the Organization of American States (OAS), Dr. Everson Hull Ph.D.
Addressing the media at Press Conference to kick start Diplomatic Week in St. Kitts and Nevis on Monday (Apr. 4), Dr. Hull said the Federation is buffeted by the issues relating to Correspondent Banking and the collapse or the retraction by those institutions in providing such services.
In giving an insight into the Correspondent Banking Relations, Hull said that there will come a period where it will be difficult to wire funds, while local financial institutions will look to increase their prices to undertake such services.
“That is going to be very important because as you know for a student here, or for someone who has relatives abroad; whenever they try to send money or wire money at home, those funds will have to be channelled through a Bank in New York, and the Bank in New York is called a corresponding bank,’ he said.
“There are plans afoot to limiting access of those funds or denying them the opportunity for providing those services, and that is going to have a devastating effect.”
Hull, who is a Business Economist, pointed out that the “devastating effect” will not only be felt in St. Kitts and Nevis, but throughout the entire Caribbean region and Mexico.
In fact, Mexico is being touted by the Economist as being a direction that the Federation should look towards as being a major trading partner.
“Mexico has a very high volume of remittances, so that is an issue that is very much on our minds,” he added.
Corresponding Banking Relations is an initiative where one financial institution provides service on behalf of another.
Just recently, the International Monetary Fund (IMF) urged Caribbean countries to implement systems to alleviate the fallout from the loss of Correspondent Banking services.
According to regional news agency The Antigua Observer, Antigua’s Prime Minister Gaston Browne led a regional delegation to a meeting in Jamaica.
The meeting held between US authorities and Caricom officials was called the Caribbean Public Private Dialogue on CBR.
The Observer understands that the meeting also saw representatives from several banks speaking with authorities.
Mr. Browne’s office in a statement on Tuesday said, “I intend to forcefully put forward Caricom’s position on this matter to the US authorities because I believe we are being treated unfairly.
“We have been labelled as tax havens and accused of lax tax regimes and avenues for money laundering and terrorism financing, yet there is absolutely no evidence to support these allegations … In all instances where banks and financial institutions have to pay penalties on such matters, not one Caricom nation has ever been involved. This cannot be right – it cannot be just.”
