26 C
Willemstad
• vrijdag 29 maart 2024

Extra | Journaal 26 maart 2024

Elke werkdag het laatste nieuws van Extra, nu ook in het Nederlands. Bron: Extra

Democracy now! | Monday, March 25, 2024

Democracy Now! is a national, daily, independent, award-winning news program hosted by journalists Amy Goodman and Juan Gonzalez. Democracy Now!’s War and Peace Report provides our audience...

Extra | Journaal 25 maart 2024

Elke werkdag het laatste nieuws van Extra, nu ook in het Nederlands. Bron: Extra

Democracy now! | Friday, March 22, 2024

Democracy Now! is a national, daily, independent, award-winning news program hosted by journalists Amy Goodman and Juan Gonzalez. Democracy Now!’s War and Peace Report provides our audience...

Extra | Journaal 22 maart 2024

Elke werkdag het laatste nieuws van Extra, nu ook in het Nederlands. Bron: Extra

Democracy now! | Thursday, March 21, 2024

Democracy Now! is a national, daily, independent, award-winning news program hosted by journalists Amy Goodman and Juan Gonzalez. Democracy Now!’s War and Peace Report provides our audience...
- Advertisement -spot_img

CC | IMF agrees withdrawal of correspondent banks poses significant risk to Caribbean economies

HomeLandenArubaCC | IMF agrees withdrawal of correspondent banks poses significant risk to...
IMF ziet kritische uitdagingen voor de toekomst
IMF agrees withdrawal of correspondent banks poses significant risk

PORT OF SPAIN, Trinidad–A significant threat to Caribbean economies has emerged as global banks withdraw their correspondent banking relationships in these countries, the International Monetary Fund (IMF) has confirmed.

Correspondent banking with global banks allows smaller banks access to the international payments system, facilitating money transfers through transactions such as wire transfers, cheque clearing and currency exchange. Without these banking relationships, businesses are cut off from international trade and financing, families are unable to collect remittances from relatives working abroad, and foreign investors may be unwilling to invest if there is a risk they will be unable to repatriate their profits.

The threat to Caribbean economies from large-scale withdrawal of correspondent banks was high on the agenda of policymakers attending the 2016 High Level Caribbean Forum in Port of Spain, Trinidad, on November 2.

“The withdrawal of correspondent banking relationships presents a clear and present danger to the Caribbean,” declared IMF Deputy Managing Director Tao Zhang in opening remarks at the forum, which was co-hosted by the IMF and the Government of Trinidad and Tobago.

A survey conducted by the Caribbean Association of Banks shows banks in 12 countries in the region have experienced loss of correspondent banking, among them the Bahamas, Belize, Guyana, Jamaica, Suriname, Trinidad and Tobago, and countries in the Eastern Caribbean Currency Union.

In Belize, the withdrawal of correspondent banking relationships is systemic, with affected banks’ assets amounting to more than half of the domestic banking system’s assets. In other countries, the loss of correspondent banking relationships has not reached systemic proportions but still presents an urgent threat.

Increased regulation of banking systems globally – to address concerns about tax evasion and combat money laundering and the financing of terrorism – has had the unintended consequence of making correspondent banking relationships costlier and less attractive to global banks.

Increased enforcement and unclear regulatory expectations present correspondent banks with the possibility of large fines for noncompliance, particularly in cases where local privacy laws prohibit the sharing of information about banks’ customers. Thus, the withdrawal of correspondent banking services is seen as “de-risking” by global banks.

Another concern highlighted during the forum is the risk that increased monitoring would push transactions to informal channels, making it difficult to monitor illicit transactions and in effect countering anti-money laundering efforts.

Search for solutions

IMF officials said de-risking was an issue that the institution regarded as very important for its member countries and reaffirmed the IMF’s commitment to helping countries find solutions, including through increased policy dialogue and technical assistance.

“We believe a solution to this issue requires dialogue between countries, regulators and banks, and increased information exchange. This can help clarify regulatory expectations, build trust, facilitate capacity building and highlight best practices,” Zhang said in his opening remarks.

Panellists expressed a sense of urgency to address the impact of de-risking on the region. They encouraged policymakers to examine the scope for collective solutions to mitigate the cost to individual countries of introducing measures – such as taking advantage of better technology to facilitate information sharing and reduce the cost of providing correspondent banking services.

Shake-up in Caribbean tourism?

The Caribbean forum also featured a lively discussion on the likely impact from the normalisation of relations between Cuba and the United States. Panellists agreed the tourism sector was the most likely to be affected.

Challenges would arise if, as seems likely, Cuba opens up to tourists from the United States, potentially diverting tourists away from other Caribbean destinations in the short term. However, the consensus among panellists was that the opening up of Cuba should be viewed not as a threat but as an opportunity to expand tourism in the rest of the Caribbean – an opportunity to become more competitive and to build the Caribbean brand. “The region has shown its resilience on this front before – when the Dominican Republic emerged as a tourist destination. It can be done again,” Zhang said.

Underscoring the need for regional cooperation, keynote speaker Gervase Warner, president and Chief Executive Officer (CEO) of Trinidad-based Massy Group, called on the region’s leaders to address disadvantages caused by small economies. “There’s no cavalry coming to our rescue,” he said, and challenged them to take a collective approach to solving the region’s problems.

Bron: Curaçao Chronicle

Geef een reactie

Vul alstublieft uw commentaar in!
Vul hier uw naam in

Zoeken

Recente reacties