De-Risking in the Caribbean: Which Solutions Lead to Improved Relations Between Banks?

While global correspondent banks’ motives for de-risking are unclear, what is clear is the current effect of terminations, restrictions, and sanctions on regional financial payments and settlements systems. The region comprises small, open economies that rely on international payments systems to facilitate trade flows, remittances, foreign direct investments, and credit card settlements; any disruption to this will be destabilizing.

In uncovering forward-leaning solutions to help maintain the relation between global banks and national respondent banks, it is crucial to include (a) open dialogue to aid the balancing of risk, compliance, and cost; (b) a proactive role in which regional governments and national regulators continually seek creative ways to provide and maintain financial services; (c) better use of technical tools—such as Know Your Customer utilities and Legal Entity Identifiers—that can build and enhance compliance structures; and (d) developing more transparent compliance structures and improving training for front-line staff.

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.