Caribbean Region Most Affected by Loss in Correspondent Banking Relationships…

by caribbeantradelaw

correspondentbankingThe withdrawal by international banks of correspondent banking relationships with Caribbean-based banks and money transfer businesses has once again been making headlines in the Caribbean. This week Antigua & Barbuda’s Prime Minister raised the issue at the Fourth Summit of the Community of Latin American and Caribbean States (CELAC), terming it a “clear and present danger”. Last year mere weeks after Prime Minister Barrow of Belize raised the issue in his address at the Summit of the Americas in Panama, the Bank of America severed ties with Belize Bank, the largest bank in Belize.

Correspondent banking relationships are Caribbean countries’ umbilical cord to the international financial system. They allow for the conduct of international trade and investment by facilitating crossborder payments, as well as the receipt and sending of remittances through international wire transfers. At the microlevel these relationships help local exporters to receive payments for their goods and services, local businesses to pay for imports, and poor families to receive remittances for their day to day survival. As I mentioned in an earlier article, the loss of correspondent banking relationships could spell disaster for the small, open economies of the region which are highly dependent on trade and investment flows, with implications for poverty reduction and eradication.

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36 Comments on “Caribbean Region Most Affected by Loss in Correspondent Banking Relationships…”

  1. Vincent Haynes January 30, 2016 at 6:50 PM #


    Caribbean leaders must continue to raise the issue at the diplomatic and multilateral levels at every opportunity, and join forces with other similarly affected countries in advocating for an immediate global solution to the problem, including action on some of the proposals highlighted in the World Bank’s and E15 Initiative’s reports.

    Can we forget about diplomatic&mutilateral levels and look at the suggestion of joining forces…..what would that achieve and would it mean that Caricom speaks?


  2. Gabriel January 30, 2016 at 6:59 PM #

    OSA’s detractors rained scorn upon his efforts to join these island states in a CSME relationship.Now. They will be forced to join together to speak as one voice.If that is the outcome of this latest development,it’s a plus.Matters such as trade,border protection,development,Justice etc should be a Caricom function.Stop the myopic politics or have it done for you at the insistence of outside forces.


  3. David January 30, 2016 at 7:15 PM #

    CSME and functional cooperation are two different approaches.


  4. Violet C Beckles January 30, 2016 at 8:12 PM #

    More and more log as talking, People just reply and not study what went on in the basement.

    Last years Antigua PM Brown head of the meeting with the CC leader including this crook , liar and scumbag OM of Barbados,

    Brown warn them if they dont clean up there Banking , If not the international banks will pull out and the local Bank will close,

    Before We warn you all that Barbados is where all the Fraud and Laundering got its start or jump and the rest of the CC join in with the help of lawyers and Minister ect sir COW , Sir -Chelthenham to good crooks to start ,

    With CJ Simmons and the rest of the PIMP title holders,

    Fueled by Massive Land Fraud and Massive Money laundering ,on A Massive National Racketeering level.

    BU writers study this before you blog, All of this is now long talking smoke, Damage is done for no one , even the Not so Royal Barbados Police will go after and charge the Ministers , We all now have to sink ,

    We will take years to recover for the Next Elections will give the people of BIM the chance to remove these Bitches as Ministers and Laundering,

    The Roots of Barbados and its History, rewritten IN A WHITE IMAGE,

    AS WE SAID BEFORE this is why they are dealing with BRICS and their money , IMF, IADB and other turn their back on Black nigger leaders that want to get rich fast on the back of its people, Now looking to over tax . over VAT over DUTY its people to make them look good as we not look to white people at all PORTS, AIR AND SEA TO SAVE THEIR NASTY ASSES,

    WE CAN BLOG OR TAKE ACTION AND REMOVE THERE FFVVCKING CROOKS, remove them all and vote CUP ,,, We know what was done in the dark we have the light on them,


  5. TheGazer January 30, 2016 at 8:40 PM #

    Caricom: 17-18 million people; Haiti 9.5M, Jamaica 2.4M, Trinidad 1.3M.


  6. Hopi January 30, 2016 at 8:41 PM #

    So what? Let the thieving rats withdraw. Its not voluntary.They’re being forced out by AIIB. This has nothing to do with money-laundering and drug-money in the region because these big US banks are the biggest money lauderers and racketeers in the financial world. The codes and rules they create are only for small fish like the caribbean, they don’t abide by them. The BRICS led by the Chinese and Russian are sick as shite of their filthy, hegemonic, usurpation of the World financial and political system that’s why they’ve implemented their own.

    So let the region get their act together and stop their reactionary behaviour and work with the NDB, AIIB and other BRICS financial institutions. For too long these stinking jew-owned banks have been looting this planet and very soon they will be history along with their bloody petro-dollar.

    There’re two new Sheriffs in town. One is carrying a big purse and he’s being backed up by the other with some serious big guns.

    Stop pissing your pants, straighten your backbones and welcome the change.


  7. Violet C Beckles January 30, 2016 at 10:03 PM #

    That is why we also need Gold and not cloth acting as paper back buy bad faith and no credit, Crooks they all are and we will see if BRICS treat other better than the International Mother Fvvckers, IMF , and others, Maybe we will use a better crooks system or stop crooking the Public and d what needs to be dont with the tax money and not enter in the pockets of the Ministers and ,lawyers


  8. chad99999 January 31, 2016 at 2:11 AM #

    Will West Indians please stop justifying regional integration at every turn? The long term cultural and demographic consequences are horrific. Just think what Guyana and Trinidad will look like in 2050 and you begin to get the picture. By 2100, Barbados, Grenada, and Antigua will be transformed.
    This is what you call slow cultural and political suicide. Self-marginalization. The Jamaicans will be OK, but the rest of us, not so much. Are we that stupid?


  9. Violet C Beckles January 31, 2016 at 6:36 AM # ESF/IMF


  10. caribbeantradelaw January 31, 2016 at 8:18 AM #

    @Vincent Haynes, CARICOM has been speaking about the issue with a collective voice in diplomatic fora and the Caribbean Association of Banks has been working on it as well. So it is being addressed at a regional level.


  11. David January 31, 2016 at 8:22 AM #


    Let us understand what is happening with these banks de risking. We have international banks creaming profits from our region for nearly a hundred years a la Cable & Wireless and now the time has come to shaft us. What can Caricom and the Regional Negotiating Machinery do? Sorry, a little cynical with this one.


  12. caribbeantradelaw January 31, 2016 at 8:36 AM #

    @David, it is the banks overseas (correspondent banks) which are de-risking and not the ones in the Region. The large overseas banks like Bank of America which have correspondent banking relationships with indigenous banks and money transfer companies in the Region are saying basically the cost of compliance or the risk of dealing with Caribbean banks is so high that they can no longer provide correspondent banking services for Caribbean banks and thus are ending their relationships, often times with little notice and without giving a good reason why.

    The FATF has already stated that this wholesale de-risking is not what is intended by the guidelines. But let’s be honest, if I am a large bank and I face huge sanctions if I unwittingly facilitate moneylaundering, I’ll be very skittish about for whom I provide services.

    Let me just say loss of correspondent banking services is not a Caribbean-specific phenomenon but is happening in other countries, although the Caribbean appears to be the most affected.

    In regards to what can be done, so far Caribbean countries have been raising the issue at various international fora as well as on the bilateral level with the US. But what needs to be done as well is building alliances with other countries/regions which are also affected and lobby for a global solution to the problem, including implementing some of the proposals which have been made by the WB.


  13. David January 31, 2016 at 8:43 AM #


    We are concerned about the same issue i.e. international banks with correspondents in the Caribbean. Can you imagine the leverage these international FIs have on our impoverished governments?


  14. caribbeantradelaw January 31, 2016 at 8:52 AM #

    @David, I agree. It’s a serious issue for sure and is one we in CARICOM need to keep on advocating about. So far, disaster has been averted because those banks like Bank of Belize which have lost correspondent banking relationships with large US banks have been able to find smaller US banks willing to provide the service. But if those banks terminate their services too, local banks won’t have any correspondent bank in the US at all to provide services for them.


  15. David January 31, 2016 at 8:55 AM #

    Agreed and imagine the risk premium the indigenous banks have to pay because of the lack of appetite by bigger banks. It translates to higher cost to do business, higher cost to the customer.


  16. Well Well & Consequences January 31, 2016 at 9:59 AM #

    The Caribbean banks, they have no choice, must do more due diligence, they have no choice. Their central banks must stop facilitating criminals like Leroy Parris et al. I too would pull my services if that type of illegal transaction puts my services at risk and the other local banks are being used by other individuals…..

    FDIC charges these banks hundreds of millions in fines when they are caught…..these banks are monitored for illegal transactions done by suspicious characters.

    If the Caribbean governments continue condoning these behaviors because they are connected to those people, no international institution has to tolerate those criminal behaviors….bottomline.


  17. Vincent Haynes January 31, 2016 at 1:41 PM #

    caribbeantradelaw January 31, 2016 at 8:52 AM #

    I am still not clear on

    What happens if the……local banks won’t have any correspondent bank in the US at all to provide services for them…..Could you spell it out such as XYZ will take place.

    What choices do we have other than talks and banding together,as none of these will ever work…..we have nothing to offer them in return.


  18. Due Diligence January 31, 2016 at 2:33 PM #


    It’s a story that illustrates the risks domestic banks face in the sometimes murky world of “correspondent banking” – the practice of offering accounts and services to offshore financial institutions. Because of increasing concerns over money laundering, it’s a line of business that has recently been facing increased scrutiny from large banks around the world.


  19. TheGazer January 31, 2016 at 4:24 PM #

    WW&C and Due Diligence fully describe what the underlying problem is.
    CTL seem to think that there is power in numbers. Oh, how I enjoy reading of Gulliver’s travels and the effort of the Lilliputians in binding him.
    Caribbean banks must get their houses in order if they expect US banks to take them seriously.


  20. Vincent Haynes January 31, 2016 at 4:39 PM #

    The facts are that we all know what the underlying problems are,we also know that it cannot/will not be solved to the satisfaction of the US bankers…….hence the question as to what we can expect is asked and can we find other bankers?


  21. TheGazer January 31, 2016 at 4:56 PM #

    Forgive me Vincent, but I see it differently. I do not believe that we can do an end-run around US banks (laws) by finding other bankers. Let us not quibble and agree that it is an end-run around. We have to clean up our mess first.

    Large foreign banks have often been penalized by the US. I do not see them jeopardizing their business for the little money that can gained from the Caribbean.


  22. Well Well & Consequences January 31, 2016 at 7:51 PM #

    Vincent is willing to try the end run around US banks, so it can be business as usual for corrupters and those who practice corruption. No Vincent, no other banks will risk screwing up their reputations to enable corruption, not even the BRICS or tower of they too will still have a relationship with US banks to uphold.


  23. Well Well & Consequences January 31, 2016 at 8:04 PM #

    SEC takes it’s due diligence very seriously, and are allowed cross border investigations. …ha


  24. Green Monkey February 1, 2016 at 3:57 PM #

    The West Is Traveling The Road To Economic Ruin

    By Paul Craig Roberts

    Michael Hudson is the best economist in the world. Indeed, I could almost say that he is the only economist in the world. Almost all of the rest are neoliberals, who are not economists but shills for financial interests.

    If you have not heard of Michael Hudson it merely shows the power of the Matrix. Hudson should have won several Nobel prizes in economics, but he will never get one.


    Hudson’s investigations into the problems of our time took him through the history of economic thought. He discovered that 18th and 19th century economists understood the disabling power of debt far better than today’s neoliberal economists who essentially neglect it in order to better cater to the interest of the financial sector.

    Hudson shows that Western economies have been financialized in a predatory way that sacrifices the public interest to the interests of the financial sector. That is why the economy no longer works for ordinary people. Finance is no longer productive. It has become a parasite on the economy. Hudson tells this story in his recent book, Killing the Host (2015).

    Readers often ask me how they can learn economics. My answer is to spend many hours with Hudson’s book. First, read the book through once or twice in order to get an idea of what is covered. Then study it closely section by section. When you understand the book, you will understand economics better than any Nobel prize-winning economist.

    Treat this column as an introduction to the book. I will be writing more about it as current events and time permit. As far as I am concerned, many current events cannot be understood independently of Hudson’s explanation of the financialized Western economy. Indeed, as most Russian and Chinese economists are themselves trained in neoliberal economics, these two countries might follow the same downward path as the West.

    If you put Hudson’s analysis of financialization together with my analysis of the adverse impact of jobs offshoring, you will understand that the present economic path of the Western world is the road to destruction.


  25. David February 1, 2016 at 4:11 PM #

    There is a report on a Canadian bank caught up with this correspondent banking mess.


  26. Vincent Haynes February 1, 2016 at 4:44 PM #

    TheGazer January 31, 2016 at 4:56 PM #

    Thanks for the answer you gave,I now understand that all innocent&guilty will go down together once it hits us…..hopefully this will be an incentive to reform our system……I do not hold my breath.


  27. Due Diligence February 1, 2016 at 4:54 PM #


    Here is the report on the Canadian bank, Toronto Dominion. caught up with the correspondent banking mess, via Allan Stanford

    Full Story -The Billionaire and the Bank


  28. David February 1, 2016 at 5:14 PM #


    TD is known as one of the big 5 in Canada.


  29. Due Diligence February 1, 2016 at 6:52 PM #


    TD is 2nd largest after RBC


  30. David February 1, 2016 at 7:28 PM #


    That video is damaging to TD and Antigua and by extension the Caribbean.


  31. Hopi February 1, 2016 at 7:39 PM #

    This year is supposed to be “THE YEAR OF DEBT JUBILEE” Iceland has already jailed its bakers and forgiven the debt of its population. The Vatican is said to be clearing out its vaults to help erase debt worldwide. So maybe the PM could send Father Harcourt Blackett over to the Vatican for some relief.

    and while we’re at it”””

    Say goodbye to SWIFT and Hello to CIPS.


  32. Well Well & Consequences February 1, 2016 at 10:43 PM #

    That is why I said the constitutional lawyers should be checking on if this 50 year independence milestone has any debt forgiveness attached, if it does, don’t hold your breath to be told anything by DBLP….as usual they would not want the people to know…it’s worth checking into.


  33. NorthernObserver February 3, 2016 at 12:01 AM #

    The debt relief pertains to the worlds poorest countries only. I believe Guyana and Haiti are the only 2 in the Caribbean area. The large majority are African nations.


  34. David February 6, 2016 at 9:07 AM #

    IMF’s 2010 Reforms finally come into effect

    by caribbeantradelaw

    Alicia Nicholls After five long years of waiting, the 2010 reforms of the International Monetary Fund (IMF), which aim to modernise and democratise the IMF’s quota and governance system by giving greater voice to emerging economies, have finally come into effect on January 27, 2016. The voting rights, access to financing and subscriptions of the 188 country members of […]

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