| – Finance Minister warns If de-risking continues unchecked, all Caribbean states can ultimately experience an economic collapse.This fiscal forecast was recently delivered by Finance Minister Winston Jordan at a high level meeting in the United States. There,NFL Jerseys Cheap, he spoke on behalf of the economies of Guyana and the rest of the Caribbean.He also elaborated on issues between those states and the IMF as well as where more help can be provided in certain areas.One of those crucial challenges he spoke of, was the withdrawal by international banks of correspondent banking relationships, a process known as “de-risking”.Jordan said that this comes at a time when, more than any other time, the financial system of Caribbean nations such as Guyana, is deeply integrated with, or substantially connected to,Authentic NFL Jerseys Wholesale, those of other countries across the world through correspondent banking.While this trend has affected countries around the globe, Jordan said that the small economies of the Caribbean have been hit especially hard.The Finance Minister said that in the first half of 2016 alone, at least 16 banks, across five countries in the region, have lost all or some of their correspondent banking relationships.The economist stressed that Correspondent banking is the life blood of global commerce.He said that healthy correspondent banking relationships are essential because they facilitate trade, foster economic growth, create legitimate avenues for growing remittances and provide access to financial services.Jordan said that the adverse effects of de-risking on international trade, financial stability and growth, and money transfers and remittances have already been felt in many of the Caribbean countries.“If de-risking continues unchecked, all Caribbean states can expect to experience some level of macroeconomic instability, financial exclusion and, ultimately, economic collapse. The recommendations that have been posited, such as bundling of services, taking out insurance, and collectively approaching correspondent banks appear to be unrealistic.”The Finance Minister said that the issue is further complicated by the fact that banks in the Caribbean do not have a long list of international banks with which they can form correspondent banking relationships.He said that the progressive loss of correspondent banking relationships will increase, so will the already disproportionately high level of operational risk.Jordan said that over the last three years, the region has been addressing this issue not only through the implementation of the Financial Action Task Force (FATF) recommendations on Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT),Alex Delvecchio Red Wings Jersey, but also through numerous studies, reports and high level meetings with organizations such as the International Monetary Fund (IMF), World Bank, United Nations and the Commonwealth Secretariat.“In spite of numerous promises to address the problem, however,Cheap NFL Jerseys, there has been virtually no progress to staunch the hemorrhaging by these banks. This non-action,NFL Jerseys Outlet, in light of the substantial work that has already been done, is worrisome,” the Finance Minister expressed.He has since called on the International Monetary Fund to play a more realistic and proactive role in dealing with this phenomenonHe said, “It is the IMF to whom we look to aggressively support Caribbean nations in taking a multi-faceted approach to fighting de-risking, consistent with the Financial Stability Board’s four-point plan.”Jordan said that this plan includes further examination of the issue, clarification of regulatory expectations,Cheap Stitched Jerseys, capacity-building jurisdictions where respondent banks are affected, and the strengthening of tools for correspondent banks to perform due diligence checks.He said that implementing this plan will require cooperation with both international banks and regulators in the United States, Europe, and other regions where international banks are domiciled.“We must ensure that rather than being cut off from international banks, our local financial institutions and supervisors can learn from their best practices for AML/CFT risk management,” the economist expressed.Jordan insisted that the IMF can play a critical role by facilitating engagement and collaboration among international banking institutions, global supervisors, and the nations suffering from this wave of de-risking, by pressuring these institutions to take immediate action. |
