B'dos to undertake CARICOM banks compliance assessment
Jovan Johnson, Staff Reporter
Barbados is to undertake a study on the levels of compliance by banks in the Caribbean Community (CARICOM) with international guidelines as part of efforts to respond to the impending abandonment of correspondent relationships with international financial institutions.
Correspondent banking involves banks in much larger countries typically based in North America or Europe facilitating transactions for local domestic banks which do not offer certain international services.
The region has said large banks are ending their relationships without considering the local economic impact.
The Gleaner has obtained a copy of a document submitted by the Governor of the Central Bank of Barbados, DeLisle Worrell, to the 37th CARICOM heads of government conference now underway in Guyana.
Worrell noted that a number of strategies are being implemented to respond to the issues, one of which is a follow up study to determine compliance levels among CARICOM countries with international financial guidelines.
"The Central Bank of Barbados is in the process of initiating a follow-up study on de-risking which will cover the role of small international financial centres in increasing the efficiency of global commerce; the status of the Caribbean regulatory, legal and risk frameworks and processes visa-vis international standards and best practices.
He said the study will assess the compliance using data monitored by "monitored by the IMF, World Bank, Basel Committee on Banking Supervision, the Financial Action Task Force on Anti-money Laundering, the Global Forum on the Tax Exchange of Information, the US FATCA and others".
The follow-up study comes as leaders at the CARICOM conference argue that they have been compliant and that compliance, according to Jamaican Prime Minister, Andrew Holness should be "rewarded".
Other strategies, Worrell says are being pursued include policy harmonisation and the training of bank staff.
Meetings have also been held with the United States' Treasury and the State Department for their intervention.
CARICOM has said that "if all correspondent banking relations are withdrawn, the region will be isolated from the rest of the world and will be unable to carry out some of the most basic of bank transactions".
"Critical services, including remittance transfers, international trade, and the facilitation of credit card settlements for local clients, among other services, will be affected," CARICOM also argues.
Belize has had many of its correspondent banking relationships cut off.