Regional countries have warned that CBRs, which enable the provision of domestic and cross-border payments and terminated in some jurisdictions, could adversely affect their economic development and have been making representations to countries such as the United States in a bid to reverse that situation.
Antigua and Barbuda Prime Minister Gaston Browne, who is leading the CARICOM initiative on the matter told the Caribbean Media Corporation (CMC) that his committee will be recommending to regional leaders at their summit here the staging “of a global stake holder conference where will bring all the stakeholders together.
“We are also looking at the possibility of engaging different advocacy groups in the United States and Britain to ensure that we get across our message effectively,” he said noting that the Caribbean’s position could be further enhanced with the various charities and foundations complaining of their inability to do business because of the CBRs’ situation.
‘Even for example, the Bill Gates Foundation, the Clinton Foundation, they are having difficulties moving funds. Many of them are dealing with global issues including AIDS that affect them the Caribbean region and it is necessary for us to bring all of these stakeholders together so that we can address this issue and to carve out the space for the Caribbean”.
He said that “some form of incentive for these corresponding banks to provide the service to Caribbean countries are very very important even if it means modifying the sanctions and the penalties in order to make it easier for corresponding banks to do business in the Caribbean.
“Something has to be done, otherwise they will create a bigger problem,” Browne said.
In a paper released in Washington last Thursday, the International Monetary Fund (IMF) said that policy responses to CBR withdrawal need to be tailored to the specific circumstances of a country or a region, and take into account the complexity of the CBR withdrawal.
The Washington-based financial institution said that they could include continued effort to build understanding of the causes and implications of this phenomenon.
“To that end, it is key to go beyond surveys. Authorities need to reach out directly to financial services providers to further improve their data collection to better understand this phenomenon,” said the IMF.
A CARICOM Secretariat statement issued ahead of the summit, noted that the assessment of de-risking scenario “is that it is unfair and the predictions about its impact on the region are dire, and the call to action is extremely urgent.
“Regional banking institutions rely on such relationships in order to allow residents to conduct international financial transactions. The issue has been occupying the attention of regional policy-makers, following signals by international banks that they are unwilling to continue carrying the business of regional banks,” the statement said.
Barbados Prime Minister Freundel Stuart said that the CBR situation if “of a deep interest” to his island “because if it is not resolved our international business sector will be profoundly affected.
“The economy of Barbados has also over the years relied very heavily on remittances from our very large diaspora in various capitals of the world, Canada, the United States and the United Kingdom. So this is just not another issue for Barbados it is fundamental to our way forward and therefore we fully identify with our colleagues in CARICOM who are similarly threatened “.
He said that in terms of lobbying in the capitals of the world where the CBRs operate, it was imperative to “get them to understand that this is an existential issue for us in Barbados …and there can be no relaxation of our advocacy in that regard.
“We just have to make ensure that we turn the situation around,” Stuart told CMC..
The CARICOM statement said that at least eight financial institutions in Barbados, seven in Jamaica and five in Belize and others in Antigua and Barbuda, Montserrat and other member states have been affected by a termination of or restriction in correspondent banking relationship.