(CMC) Antigua and Barbuda Prime Minister Gaston Browne met officials of the Barbados-based Caribbean Development Bank (CDB) and the Jamaica National Building Society (JNBS) on the Region’s efforts to address the withdrawal of correspondent banking services.
The meeting also discussed the upcoming conference on de-risking in October in Antigua and Barbuda.
Correspondent banks, which are mainly large, international banks based in the United States of America, Europe and Canada, provide Caribbean states with vital access to the international financial system, by offering services to smaller, domestic banks and financial institutions to complete international payments and settlements.
However, many banks, which provide correspondent banking services have been seeking to manage their risks by severing ties with institutions in the region.
“De-risking of correspondent banking services is an existential threat facing the Caribbean region which has the potential to decimate our living standards,” Prime Minister Browne said following the meeting in Antigua last weekend.
Via CMC
The issue of corresponding banking was a major item at the annual summit of Caribbean Community (CARICOM) leaders in Guyana in July and recently Jamaica Prime Minister Andrew Holness described de-risking as a “clear and present danger”.
Browne said the Region “must work collectively… to address this threat to our survival”.
He said JNBS and CDB will provide technical assistance to advance CARICOM’s advocacy efforts and work with CARICOM to identify solutions to the challenges. They will also be assisting CARICOM to coordinate implementation efforts and to strengthen monitoring mechanisms.
As part of its contribution, JNBS is developing a website to increase awareness about the emerging issue, while the CDB will continue to work with the Caribbean Financial Action Task Force (CFATF) to build capacity of member countries.
“Correspondent banking services are a public global good that is essential for participation in global trade; and is particularly important for small island economies,” Prime Minister Browne said.
JNBS general manager Earl Jarrett pointed to the threat to services such as remittances, on which the region depends. Highlighting challenges faced by his organisation’s remittance company in The Cayman Islands, he said that the value of remittances was equivalent to a significant percentage of gross domestic product for many receiving countries in the region.
“Remittances are the lifeline for migrant communities across the Region. And, Jamaica alone, with a Diaspora population of some three million, represents one of the largest recipient countries in the Region, accounting for amounts equivalent to approximately 17 percent of our gross domestic product (GDP),” Jarrett said.
