Caricom Heads look to address de-risking threat
The recently concluded 28th intersessional meeting of the Conference of Caricom Heads of Government has decided on several different measures to address the impact of de-risking on the regional banking industry.
According to the communiqué issued at the conclusion of the meeting on Friday, the Heads of Government recognized the need for a regional approach and serious action to deal with the challenge posed by the de-risking strategies of the global banks which result in the withdrawal of correspondent banking services.
In considering measures to mitigate the impact of de-risking they recognised the need for continued urgent action to strengthen the integrity of the financial system in Caricom member states and to diminish the perception of the Caribbean as a high-risk region.
“In that regard, they considered the Strategy and Action Plan submitted by the Committee of Central Bank Governors and requested the Committee of Ministers of Finance with responsibility for Correspondent Financing to assume the oversight of its roll-out,” the communique explained.
Efforts by the Caribbean Development Bank (CDB) to assist member states to strengthen their financial systems have been welcomed even as member states are being encouraged to use heightened awareness among international development partners to secure the resources and support required to strengthen the domestic and regional financial system.
Acknowledging that the drivers of de-risking are multi-dimensional in nature, the heads of government have called for a “comprehensive stock-taking exercise to determine member states’ status and ensure that national action plans are aligned with the timetable for compliance with global regulatory standards.”
A particular need to strengthen compliance with the global regulatory standards with regard to AntiMoney Laundering/Counter Terrorism Financing (AML/CTF) and Tax Transparency Information Exchange was noted even as it was agreed that the region must continue its robust and unrelenting advocacy on the issue of correspondent banking.
They noted the advocacy initiatives that had been pursued and their success in raising international awareness of the consequences of the de-risking challenge and commended the Prime Minister of Antigua and Barbuda, and the Committee of Ministers of Finance for spearheading these initiatives towards resolution of the continuing threat to the regional financial sector and development prospects.