By Ken Richards From winnfm

St Kitts and Nevis (WINN): Overzealous regulations are what’s fueling the loss of correspondent banking relations in the Caribbean and elsewhere, according to Foreign Affairs Minister Mark Brantley.

The matter received some traction when Central Bank governors from the Commonwealth discussed the problems de-risking poses for their countries.

At their meeting in Washington, the Central Bank governors acknowledged that the reasons behind de-risking were complex, and called on all key stakeholders to work together to produce practical solutions, as a matter of urgency.

Speaking separately on the issue, Foreign Affairs Minister Mark Brantley told Winn FM the loss of correspondent banking relations remains a vexing problem.

“What we are seeing is over zealous regulations in the major countries of the world particularly the United States. I am heartened that we will see some benefits because what is now happening is that de-risking is affecting not only small countries such as those in the Caribbean but it’s also affecting larger countries and their own banking sectors as well. In fact recently I had the occasion to meet with Baroness Analey who has responsibility now for the Caribbean and the UK cap and she was indicating that her husband had been asked to produce identification and in fact had his account closed at a bank that he had been with for the past 50 years and so these are the realities of today and I think these impacts were not anticipated and as a result I think it is now coincidence of interest. We also have had a situation where this type of approach will make it difficult for major airlines such as American Airlines which has service in the region, cruise ships which has service in the region, suppliers of goods and services to the region, all of these. I think the important coincidences if you will of interest which I feel all do well for us resolving this.”

Antiguan Prime Minister Gaston Browne who has been very vocal on the de-risking issue, is organizing a conference later this month on the subject.

Minister Brantley says he is optimistic the meeting will help advance the Caribbean case.

“As I say what we now need to identify is the knock on disadvantages, the knock on ill effects of this kind of approach to banking. Let’s face it, the reality is that America must decide whether it wants to force the Caribbean and many other regions of the world into a cash system. We have to do business, we have to trade, we have to engage in the selling of goods and services and if we are denied banking then people will move to cash. Now if you are legitimately concerned about money laundering, about the risk associated with proceeds of crime, terrorist financing then it’s better to have people in a banking system than outside it. So these are all I think, very real concerns that again over zealous regulators not paying attention to these knock on ill effects have had, so that is something that we must look at.”

Governor of the Eastern Caribbean Central Bank, Timothy Antoine, says the real problem is the unintended consequences being suffered by Caribbean banks and others in the developing world.

“What it does is that it cuts us off, from the international financial system at a time when you want to get us even more involved for our development, but more than that it encourages the very problem you want to avoid because money laundering is the conversion of illegal money gained through illegal means into the legal system. If you force people to hold cash and move around cash you are encouraging that sort of behavior because there is less traceability, less transparency, that’s precisely what you don’t want.”

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For more on this story go to: https://www.winnfm.com/news/local/18931-de-risking-blamed-on-overzealous-regulations