PIF-US Treasury sign CBR agreement
THE Pacific Islands Forum Secretariat (PIF) and the US Treasury have signed a memorandum of understanding (MoU) that aims to address the decline of correspondent banking relationships (CBR) in Pacific island countries.
This decline in recent years is said to have posed significant stress on economic developments in the region.
The historic agreement signed last week marks a milestone in enhancing financial cooperation and collaboration between PIFS and the United States Department of the Treasury.
“This collaborative effort underscores the shared commitment to promoting economic resilience and prosperity in the Pacific region, key priority areas of the 2050 Strategy for the Blue Pacific Continent,” PIF secretary general Henry Puna said.
He said the support provided by US Treasury should facilitate discussions between PIF members and US correspondent banks, including US banking and financial regulators regarding anti-money laundering and combatting the financing of terrorism (AML/CFT) standards.
He said the partnership sought to address challenges in CBRs vital for cross-border payments that facilitated investments, trade, and remittances.
The agreement follows recommendations endorsed by Forum Economic Ministers last year.
According to the World Bank, crossborder CBRs had declined 30 per cent globally and 60 per cent in the Pacific.
A correspondent banking relationship involves one financial institution as the correspondent providing banking services to another financial institution as the respondent, and both institutions are based in different countries.