Saint Kitts And Nevis Proposes Bank 'De-risking' Responses
by Mike Godfrey, Lowtax.net, Washington
29 July, 2016
The Prime Minister of Saint Kitts and Nevis, Timothy Harris, has highlighted the threat bank "de-risking" poses to the territory's banking system and has put forward a plan to address the problem.
De-risking refers to international banks withdrawing from the region and includes the closure of subsidiaries, closure of customer accounts, and refusal of new business.
The plan put forward by Harris to address the problem of de-risking comprises "four pillars." The first pillar involves lobbying other countries, particularly the United States, Canada, and the United Kingdom. Harris said that a global conference is being planned to bring all the stakeholders together including correspondent banks, respondent banks, governments, and the US Treasury.
The second pillar is designed to encourage national banks to register on the SWIFT Know Your Customer (KYC) Portal, which was launched in December 2014.
The other two pillars include fast-tracking the consolidation and amalgamation of national banks (originally proposed in an "Eight-Point Plan" by the Eastern Caribbean Central Bank), and considering whether to establish a correspondent Caribbean bank in the United States.
Harris said that without correspondent banks, Saint Kitts and Nevis "will not be able to effectively engage in international trade in any matter involving the use of foreign currency ... We will not be able to have access to remittances in the way in which we now do. We will have problems utilizing our credit cards because all of these depend upon our having access to correspondent banking relationships. Without correspondent banking relationship we are in effect then blockaded from participation properly in international trade and doing international business."
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