Correspondent banking a major concern, says Barbados minister

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Minister of Energy and Business, Kerrie Symmonds, chatting with Executive Director of BIBA – The Association for Global Business, Carmel Haynes while BIBA President, Jamar Arthur-Selman (left) and First Vice President, Marlon Yarde (right), looking on. (S. Austin/BGIS)

By Sharon Austin

BRIDGETOWN, Barbados, (BGIS) – Minister of energy and business, Kerrie Symmonds, has weighed in on the financial de-risking and correspondent banking issue, saying it is of significant concern and can lead to social instability in this region.

Symmonds made the comments on Wednesday as he addressed the Luncheon Seminar of BIBA, the Association for Global Business, at the Savannah Beach Club and Hotel, Hastings, Christ Church.

The minister told the packed room: “This is a very significant and dangerous thing for us by virtue of the fact that there is the capacity to undermine commerce, undermine trade, and undermine flows of finances across borders if we do not have the correspondent banking relationships, and the correspondent banking corridors and services that we rely on.

“The correspondent banking relationships are utilised, not only by central banks, not only by commercial houses, but also by ordinary citizens….  I say to you that for me, it is a very serious thing, and if I go a step further, I would even go so far as to say that I am already sensing that it is a danger that can lead to social instability in this region.”

He noted that money transfer operators relied on correspondent banking relationships, and therefore, if families in developed countries wished to send money here to relatives living in difficult financial and social circumstances, then that inability to do so would cut those people off.

“They become stranded, and as a consequence they become a greater degree of a burden on an already overburdened social care sector,” Symmonds suggested. He added that the de-risking had already started to lead to account closures in the region, and the stranding of families who were reliant on financial assistance.

He pointed out that Latin America and the Caribbean had sustained a completely disproportionate loss of banking relationships when compared to the rest of the world.

He emphasised the importance of the prime minister’s recent testimony at the full sitting of the United States’ House of Committees meeting on the impacts of de-risking on the Caribbean and strategies for ensuring financial access in Washington. 

The minister told his audience: “The influence of the US Treasury, especially if we can get this legislated, will enable other jurisdictions who tend to follow suit, to understand the vital role that correspondent banking relationships play, and that this cannot be a matter that is trifled with because … effectively you are really toying with people’s livelihoods. And so therefore, we are anxious to see where that can go.”

During his wide-ranging address, Symmonds said change was indispensable. He added that Barbados was engineering some changes because of “our own creativity” and alluded to the deepening relations with Africa. He also disclosed that Rwanda is keen to establish a bilateral investment treaty with Barbados.

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