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Caricom leaders to mount mission to US on banking problems

Published:Friday | February 19, 2016 | 12:00 AM
Prime Minister of Antigua & Barbuda, Gaston Browne, will lead a mission to advocate for regional banks with foreign jurisdictions.

Caricom leaders wrapped up their two-day meeting with an agreement to appoint a high-level advocacy group to tackle the corresponding banking fallout.

Incoming Caricom Chairman and Prime Minister of Belize Dean Barrow told a news conference that the new group would be headed by Antigua and Barbuda Prime Minister Gaston Browne, who is also chairman of the finance ministers committee.

"This group will be charged with the responsibility to represent the interest of the region in addressing this issue, including an approach to the United Nations and the World Trade Organization," said Barrow.

"We are also talking about engaging directly with the regulators, particularly in the United States, and with the US Congress. We will meet with as many Congress leaders as the team will be able to interface with," he said.

The Caricom leaders said several international banks, mainly in the United States and Europe, have signalled to client banks in the region an unwillingness to continue doing business with them.

The so-called 'de-risking' by the global banks threatens to impact several critical services, including remittance transfers, and Prime Minister Barrow said that a letter, which he would sign, will also be sent to US President Barack Obama on the issue.

He said the regulators understand the regulatory burden the corresponding banks have to assume "is onerous" but "they also say look we are all investing in this determination to ensure that our infrastructure is as impenetrable as possible with respect to money laundering and the financing of terrorism".

"While the regulators are saying they are prepared to look at ways of lessening the weight of the regulatory burden, they say, but we have to do that in a manner that will not at the same time lessen the effectiveness, the efficacy of the requirements that our corresponding banks and all of us must observe."

Barrow said that when the Caricom mission begins its campaign, it will involve not just talking to regulators, but also the correspondent banks.

"One of the things that we have agreed on is that if there could be some effort to pool our business to say to correspondent banks in the US as we are trying to do here in Belize ... we say you could have business from every bank in Belize if you will come, and we hope that will make it more worthwhile," said the PM.

"We are going to try and do the same thing on a region-wide basis," he said, noting that in Montserrat, for example, the two banks operating there are likely to have their status revoked.

One of the possible solutions, he said, was for banks to merge, but in some cases, such as Montserrat, that may still not be sufficient to attain critical mass.

"There are no simple solutions, it is going to take a great deal of doing," he said. "All we can say is that we are just as determined to pursue all possible means until we get the kind of resolution to the issue that we want."