St Lucia–The Caribbean Association of Banks (CAB) says it fully supports the view of Prime Minister of Antigua and Barbuda Gaston Browne that there is a very real and grave threat to the Caribbean banking industry
In his remarks at the meeting of Caricom Heads and United States President Barack Obama in Jamaica earlier this month, Browne said there had been an unfair and unsubstantiated labelling of the region as a high-risk area for financial services by some US organisations. As a result there is a threat of loss of correspondent banking relationships to banks in the region.
CAB said in a statement: "Correspondent banks use the risk rating of countries, in assessing the risk profile of banks, to determine whether to continue existing or establish new relationships. The present trend is that some correspondent banks have discontinued some of the services provided to regional banks and are also not establishing new relationships particularly with small size financial institutions."
The association said correspondent banking relationships are critical in enabling key economic and financial transactions, such as, remittances, foreign direct investments and international trade in goods and services, key drivers for sustaining the region's growth and development. It warned that he loss of these vital relationships can render the Caribbean unbankable and ultimately destabilize all sectors of economies in the region.
"The CAB considers this issue to be a threat to national security for the various islands in the region," the group said.
"We are pleased to note that President Barack Obama reiterated at his meeting with the Young Leaders of the Americas, that he has committed to "examine the complaints and go through, in very concrete ways, where our concerns are and how our governments can work together".
"The CAB will remain vigilant on this serious matter and will continue to collaborate with Caricom and other stakeholders towards a resolution."