Cayman, US Officials Discuss Bank De-Risking
by Jason Gorringe, Lowtax.net, London
23 January, 2017
A delegation from the Cayman Islands' Ministry of Financial Services and Monetary Authority recently met with US officials to discuss the challenges posed by bank de-risking to the Caribbean.
"De-risking" refers to the recent practice of leading international commercial banks withdrawing from relationships with financial institutions in certain countries to reduce regulatory risk. Caribbean territories have been impacted in particular. De-risking has involved the sale of subsidiaries, banks ceasing to provide some types of banking services, and the closure of client accounts.
The Cayman Islands' delegation presented the Caribbean perspective on bank de-risking in a round of meetings in Washington DC with key US Congressional staff, regulators, and stakeholders. They also contributed to discussions on an action plan to address the issue held by the Financial Stability Board, the international body that monitors and makes recommendations about the global financial system.
"It's important to continue these talks because de-risking is still creating unintended, detrimental effects globally. We had our own taste of it when it disrupted our money services business in 2015, and the people of Cayman certainly remember their relief when the issue was resolved", said Minister of Financial Services, Wayne Panton.
He noted that the Cayman Island's banking sector fully supports the Ministry's efforts to influence broader developments in de-risking by engaging with stakeholders internationally.
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