But could this new report: “Undercover investigation reveals role of British Overseas Territories in moving suspect money,” along with suspicions of the Citizen Investments schemes in some of our other OECS states (the ECCU) be the source of difficulty and problems?
Head table at Amalgamation Forum in 2014
What is not yet, but some people are calling a ‘crisis’, a report emanating from the 27th Inter-Sessional Meeting of The Conference of Heads of Government of the Caribbean Community (CARICOM), caused reactions of concern from the public (mostly on social media) and ‘political’ officials, politicians and government officials.
CARICOM at the end of that meeting, “characterized the actions of the correspondent banks as an economic assault and was therefore tantamount to an economic blockade against Member States.”
The Montserrat Reporter has been reporting on this matter. Early this week on the TMR Facebook page we published: Just as new Governor Antoine of the ECCB has expounded and shown concerns over the Correspondent Banking issue, it is today center stage for CARICOM countries, of course. We invited readers to ‘Follow here and at WWW.themontserratreporter.com as we keep you updated.’
The reactions came from a haste to publish unverified information tentative and/or misrepresented.
Glen Ysaguirre, Central Bank Governor of Belize, in a CMC news report and picked up by the Jamaica Gleaner newspaper , had reported to CARICOM heads that from a meeting of finance ministers who met on Monday Feb. 15 to formulate a regional response to the threat to correspondent banking relationships and the possible loss of access to the international financial markets by mainly the regional indigenous banks.
CARICOM had said in a brief statement. “Several international banks, mainly in the US and Europe, have signaled to client banks in the region an unwillingness to continue carrying their business. The so-called ‘de-risking’ by the global banks threatens to impact several critical services including remittance transfers.”
Ysaguirre said that during Monday’s meeting there was a presentation by the Central Bank of Barbados on a report that they conducted in the region to assess the implications of correspondent banking and make some recommendations on the way forward.
“The participation was very robust and it revealed to us that what we have been saying for quite some time that this correspondent banking issue is one of the most serious threats to the region. It’s existential in nature and I think it is more serious in terms of its economic implications to the region than I would even want to think Climate Change for that matter, because it is most immediate and urgent.”
And then the statement that no one bothered to confirm before repeating in Montserrat. He said the meeting also learnt that Montserrat has only two commercial banks and, “they had relationships with Bank of America and they have learned that Bank of America has given them notice that within thirty days they will terminate that.”
The Governor went on to say, “That will be very devastating for that small economy. Without a correspondent banking relationship that would do what even the volcano in Montserrat couldn’t have done which is to have those people evacuate that island under the threat of that volcano.
“With correspondent banking without being cut off from access to the international financial system it will certainly force them to look otherwise for economic survival. And the story is the same throughout the Caribbean,” Ysaguirre said.
It was in June 2014, following a ECCB/Bank of Montserrat Ltd. forum on May 24, we published, “…the Bank of Montserrat is at a crossroad. Should it join with other indigenous banks in the region? “Amalgamation” seems to have been the buzz word…” Many had gathered to “discuss” amalgamation of the bank; Amalgamation seemed to many Montserratians as meaning “losing our money and liquidity.” (See: http://www.themontserratreporter.com/bom-amalgamation-do-we-have-a-choice/ )
Along with ECCB Governor Sir Venner and his deputy addressing the forum, then Premier, Reuben Meade told the gathering, that the economic situations in the other Eastern Caribbean states “impact us here on Montserrat. We must therefore develop the union as a single body.”
He assured, “the smallest bank, the largest bank once they pool their resources, you will have a stronger bank and a strong banking system.” Mr. Meade concluded his address by indicating “it is not ‘if it will happen’, it is ‘when will it happen? It will happen!’” The Amalgamation.
Particularly during the question period it came out a strong allusion to the issue of ‘correspondent banking’ while the term was not directly used. It was suggested that amalgamation of the banks would make a stronger banking system that would be more impressive if only for that purpose.
The Belize Central Bank Governor had concluded in the report by saying: “this ‘is not an issue with Belize as a jurisdiction but this is a most unfortunate development on the whole de-risking issue”, one they had been dealing with the past two years and had spread through the wider Caribbean.
Subsequent to the ‘upheaval’ that followed, with suggestions from Opposition Leader Reuben Meade how to prepare for the eventuality of cessation of correspondent banking relationships with Montserrat, and a statement from Bank of Montserrat refuting any notice from Bank of America that it will cease such relationships.
The Premier issued a statement but even then social media went berserk with uncomplimentarys of all kinds; as social decline grows. In his statement the Premier assured that there is no need for panic; that since last year steps had been taken to pursue and negotiate alternative possibilities, some of which have already been identified, in the eventuality. He confirmed his assuredness saying, “At the last JMC in December of 2015, the UK Government agreed to support the Overseas Territories in liaising with UK banks to ensure that Territories have full access to uninterrupted merchant and correspondent banking services.”
CARICOM explains – and will take the issue to the UN and the World Trade Organisation (WTO), as well as the United States Congress. But how aware were they of the report referred to in our Editorial on an Investigation report coming out of New York just before the meeting?
Following the meeting a communiqué report from CARICOM said, “Heads of Government deplored the progressive decline in correspondent banking relationships available to the banking sector in Member States, as a result of the de-risking strategies employed by the global banks. They opined that the withdrawal, restricted access and /or the higher cost of such services, allegedly in response to the heightened regulatory posture of regulatory authorities, would destabilize the financial sector in Member States with deleterious effects on growth and economic progress, as well as national security.
Heads of Government emphasised that CARICOM Member States have complied with all global regulatory standards, including those established by the Financial Action Task Force (FATF) and the Global Forum, and have been scrutinized in every detail by the IMF and other multilateral institutions. Indeed, they characterized the actions of the correspondent banks as an economic assault and was therefore tantamount to an economic blockade against Member States.
Heads of Government therefore agreed to the appointment of a high-level advocacy group, led by the Prime Minister of Antigua and Barbuda. This group will be charged with the responsibility to represent the interest of the Region in addressing the issue, including an approach to the United Nations and the World Trade Organisation, as well as the United States Congress, to create greater international awareness of the challenge confronting the Community.
