Bank 'De-risking' A Global Concern, Says Barbados
by Mike Godfrey, Lowtax.net, Washington
28 July, 2016
The Governor of the Central Bank of Barbados, Worrell DeLisle, said that de-risking is severely impacting banks in Latin America and the Caribbean.
His comments were made to a meeting of the Financial Stability Board (FSB) in Chengdu, China. The FSB is an international body that monitors and makes recommendations about the global financial system.
Worrell explained that banks in the Caribbean and in Latin America had become very selective about opening new accounts, subjecting all clients to intensive scrutiny, "arbitrarily" closing accounts of long standing customers, selling off subsidiaries, and cutting back in other ways. The actions taken by banks were all in an effort to reduce their risks of incurring huge fines and penalties, to limit damage to their reputations, or to limit other costs and sanctions.
To address the issue of withdrawal of correspondent banking relationships, the FSB has appointed a task force, of which Sadie Dixon, the Central Bank of Barbados' legal counsel, is a member. The Chair of the task force reported that investigations so far have revealed a decline in the number of "active correspondents," across all regions of the world.
Regional groups from Asia, Africa, and the Middle East have also reported to the FSB on the issues they are also facing on this matter, and the International Monetary Fund and the World Bank have provided the findings of research.
Worrell said that he welcomed the FSB's coordinating work on what is now recognized to be a global problem.
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