CARICOM stresses urgent need to address correspondent banking issues

OAS Permanent Council to discuss finance and banking services challenges

Caribbean Community (CARICOM) countries says there is an urgent need for action to be taken to ensure that banking regulations designed to foster transparency and accountability and prevent money laundering and terrorism financing do not result in financial exclusion and economic decline of small economies.

Seven CARICOM countries – Antigua and Barbuda, Bahamas, Barbados, Belize, St. Kitts-Nevis, St. Lucia, and St. Vincent and the Grenadines – have requested a special meeting of the Permanent Council of the Organization of American States (OAS) on Thursday to discuss the issue.

The meeting will be held under the theme “Finance and Banking Services Challenges to Development in the Americas”.

The regional countries say they hope the OAS Permanent Council will adopt a resolution indicating that the “prevailing situation of the severing of correspondent banking relationships with commercial banks in some members states by global banks in other member states poses a severe threat to the economic growth, social development and political stability especially of small economies by curtailing their ability to participate in standard international financial and economic transaction”.

CARICOM leaders at their inter-sessional summit in Belize last month “deplored the progressive decline in correspondent banking relationships available to the banking sector in member states, as a result of the de-risking strategies employed by the global banks”.

They said that the withdrawal, restricted access and /or the higher cost of such services, allegedly in response to the heightened regulatory posture of regulatory authorities, would destabilize the financial sector in member states with deleterious effects on growth and economic progress, as well as national security.