We have your back, IMF says

Barbados and other Caribbean countries can count on the support of the International Monetary Fund (IMF) in the fight to protect correspondent banking relationships, the lending institution’s head has assured.

Managing Director Christine Lagarde said that some progress had been made, with “a major correspondent bank” offering at a closed-door meeting in Barbados last year, convened by the IMF, to provide technical support to respondent banks in the region.

Lagarde said this was in an effort to better understand the situation and to help the Caribbean banks upgrade their systems and improve their processes in order to satisfy the requirements by their former correspondent banks.

“A major bank, again I will not mention the name or the origin, that has left the region has now re-engaged with some banks,” Lagarde said at the opening of the IMF’s 2017 High Level Caribbean Forum at the Pegasus Hotel in Kingston, Jamaica on Thursday.

“Belize, one of the countries that was worst affected, is now recovering from a loss of over two-thirds of its correspondent relationships in 2015 and 2016, and currently Belize has at least two correspondent banking relationships, and can process transactions in a timely manner,” she added.

Pointing out that the IMF recently had another meeting on the issue with some experts and stakeholders, Lagarde said notwithstanding the efforts “the issue continues to be a challenge”.

“Let me assure you that we are not giving up on that. It is not only the issue of the status of the correspondent relationship, it is also the issue of the cost of those transactions that we will try to help with,” the IMF boss assured.

The issue of derisking became a major concern for Caribbean governments last year, as it threatened to disrupt remittance transfers, international trade, the facilitation of credit card settlements for local clients, among other services.

The international banks had said they were ending relationships as part of their effort to conform to international regulations and to safeguard their reputation against allegations of facilitating financial crimes.

Several top regional and international officials, including former Central Bank Governor Dr DeLisle Worrell and former Prime Minister Owen Arthur, have since been calling on the stakeholders to do what was necessary to address the issue, which they said could cause further damage to the local economy.

4 Responses to We have your back, IMF says

  1. Colin Daniel November 19, 2017 at 9:34 am

    Derisking has been a major issue in Barbados and the region for over 5 years not since last year. It has affected the international business industry with banks asking long standing international customers to move their accounts, and this has happened in the absence of any suspicious activity. In fact I know of two licensed banks refusing to provide services to the companies unless their turnover was more than US$40 million. Those of who have had experience in the industry is that intermixed with the large operations are many small companies that are dormant or have low transaction volumes for several years until their international operations are fully developed. There are some that will generally remain SME’s by any measurement standard. However as we are experts had we have sat and watched this happen with very low keyed response. Last year they took action against a whole industry which provides employment for 1200 again universally against all industry participants regardless of their reputation or actual experience. When the history of this period is reviewed risk managers will be rightly blamed for suppressing and destroying businesses and economic activity in this region.

    Reply
  2. Sheron Inniss November 20, 2017 at 6:41 am

    The IMF does not have our backs. They are more interested in stabbing us in our backs.

    Reply
  3. milli watt November 21, 2017 at 7:27 pm

    lolololololol

    Reply
  4. seagul November 24, 2017 at 10:38 am

    Since 1944 the IMF have been back stabbing–K Hudes.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *