Caribbean's Correspondent Banking Crisis On G20 Agenda
by Jason Gorringe, Lowtax.net, London
26 August, 2016
The Financial Stability Board has released a report that assesses the impact on the global financial system of the fall in correspondent banking relationships, which is a key issue for Caribbean finance centers in particular.
The Financial Stability Board, which monitors and assesses vulnerabilities affecting the global financial system, is to brief G20 Finance Ministers and Central Bank Governors on September 4-5, 2016.
Earlier, in November, the FSB put forward four actions to address vulnerabilities. These were that: further examination was needed to examine the "dimensions and implications" of the issue; clarification is needed on regulatory expectations, including more detailed guidance from the Financial Action Task Force (FATF); support should be provided to jurisdictions home to affected respondent banks; and correspondent banks should be supported to improve their due diligence processes.
The FSB says that the Correspondent Banking Coordination Group (CBCG), which was created to implement the plan, has made "substantial progress towards implementing the Board's action plan." Work under the action plan will continue in 2017 to address the issues, and the FSB intends to continue to monitor changes in correspondent banking to assess whether the plan is having the intended impact.
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