Caribbean leaders host US politicians, bankers for talks on financial inclusion  

Photo by Jeffrey Blum

29 April 2022

Caribbean leaders have once again appealed directly to the US congress and banks on the issues of blacklisting, de-risking and corresponding banking in the region. 

The appeals come as Barbados hosted several US and Caribbean politicians along with regional and international representatives of financial institutions for the Caribbean Financial Access Roundtable.  

The annual forum, which was proposed by US Congresswoman Maxine Waters, Chairwoman of the US House Committee on Financial Services, was developed to discuss matters pertaining to financial services and access for Caribbean countries. 

During the discussion, Caribbean leaders criticised the marginalisation of Caribbean states through restrictive international blacklists and policies.  

Barbados Prime Minister Mia Mottley argued that the international anti-money laundering (AML) regime is disproportionately punitive for small developing countries given the small risk they represent compared to large, developed nations.  

Chair of the CARICOM Commission on the Economy, Avinash Persaud called for urgent reform on the way countries are blacklisted.  

“We currently spend more per cent of GDP on AML processes than any of the countries which are the centres of money laundering,” said Persaud as he argued that Caribbean countries were spending excessive amounts of money in an effort not to be blacklisted, which was further halting economic growth. 

The issue of de-risking and associated challenges with correspondent banking relationships was also a focal point of discussions. 

“The loss of correspondent banking and the increase of the unbanked is a security challenge to the Caribbean, and I’m happy that we’re discussing this, and we have arrived at a position where we will have this annual roundtable to deal with the challenges; it will be an opportunity for us to share ideas and cooperate as we move forward,” said Guyanese Prime Minister Mark Phillips. He said that Guyana is particularly interested in increasing correspondent banking as the country leverages the oil and gas industry to become an international financial centre.  

Nigel Baptiste, President and CEO of the Trinidad-headquartered, Republic Financial Holdings Limited (RFHL) which operates in several CARICOM countries, noted that even where financial institutions have not lost access to correspondent banks, they have had to self-regulate. 

Baptiste said that in so doing, RFHL and other banks must restrict access to many individuals, most of whom tend to fall into the marginalised communities in our society. “This is unfortunate but necessary because financial institutions in the Caribbean are presented with no choice. We either de-risk our clients or be de-risked ourselves,” he said. 

Grenadian Prime Minister Keith Mitchell pushed for more action from the US on the financial issues plaguing the region. “We claim to have close borders and strong relationships, but I don’t see the evidence of that coming from policymakers in Washington. The Caribbean is literally taken for granted,” said Mitchell as he urged Congresswoman Maxine Waters, “to make strong representation back in Washington” after the meeting. 

Acknowledging that many Caribbean nations have enacted significant financial crimes compliance measures, Congresswoman Waters said that they continue to face considerable challenges in accessing financial services. She said that despite years of engaging with financial institutions, US agencies, multilateral development institutions and leaders from affected countries, it remains the inclination of banks to terminate or restrict business relationships with certain clients or countries to avoid, rather than manage, risk. 

As discussions closed, host Prime Minister Mia Mottley said that several key decisions were reached. Speaking at the press conference, she said that the US Congressional Delegation has agreed that this issue merits congressional hearings to allow the region to expose the issues to a wider audience.  

Officials also agreed to incorporate access to correspondent banking relationships into aid and development relationships and to develop a proposal to establish a financial examiner training academy in the US. 

It was decided to undertake a feasibility study on whether CARICOM should not establish a consortium bank in the US that could provide the correspondent banking relationships for banks in the region.  Leaders also undertook to mount (with the aid of the Caribbean Development Bank) an annual Caribbean-US Banking Forum. October is earmarked for the first instalment.  

“This matter is too critical to us being able to survive and to grow our economies and to provide opportunities for our citizens. We cannot have financial exclusion,” said Mottley as the session ended. 

The US Congressional Delegation was led by the Congresswoman Maxine Waters, and included Chair of the Congressional Black Caucus, Congresswoman Joyce Beatty; Congressman Ed Perlmutter; Congresswoman Stacey Plaskett; Congresswoman Sylvia Garcia, and Congressman Troy Carter.  

This is a lead article from Caribbean Insight, The Caribbean Council’s flagship fortnightly publication. From The Bahamas to French Guiana, each edition consists of country-by-country analysis of the leading news stories of consequence, distilling business and political developments across the Caribbean into a single must-read publication. Please follow the links on the right-hand side of this page to subscribe, or access a free trial.