Wed | Aug 23, 2017

Negative news hurts Caribbean banks, creditworthiness — bank exec

Published:Tuesday | October 11, 2016 | 10:18 PMNeville Graham


Jean-Pierre Saint Victor, an executive at BNY Mellon, is warning that a proliferation of negative news has consequences for a country’s creditworthiness and correspondent banking relationships.

He says such information accumulates against the name of the country and is eventually used to determine its risk profile.

Addressing the morning session of the 5th annual AML/CFT conference in New Kingston, Victor advised Caribbean media houses that in some cases, the news they generate is often the only information that is available on their countries.

That is why the information needs to be accurate and verifiable, he said.

“I don’t know why in the Caribbean they publish information that they can’t verify. This is clearly a danger to the financial system because that is the information being read by the rest of the world,” the banking executive said.

He outlined the process involved in arriving at a country risk assessment and background checks on persons doing business outside of Jamaica, saying they involve tapping all sources — including news media and social media.

Victor noted that persons of concern are those whose names are associated with negative reports and politically exposed persons or PEPs.   

“I would prefer a PEP rather than negative news. With a PEP I can google to check the information and then we relay that to my superiors, but with negative news I just have to accept it. These things are not lost they will remain there,” he said.

Victor urged Jamaican banks to collaborate more so that they can share information on persons whose activities can affect the whole financial system.

He adds that correspondent banking arrangements have moved on from KYC (know your customer) to KYCC (know your customers’ customer). The activities of one person may form a small part of the business of someone who does business with a bank but it will ultimately affect that bank since the negative reports are what external agencies go by, he warned.

This is one reason why some financial institutions have run into correspondent banking roadblocks, he added.

neville.graham@gleanerjm.com