Prof Bourne: FATCA is not the only issue
The Caribbean policy approach to resolving the correspondent banking problem in the region is unlikely to be sufficient because it does not deal with the profi tability of the banks, according to Compton Bourne, professor emeritus at the University of the West Indies (The UWI).
While speaking about “The Correspondent Banking Problem and Sustainable Economic Development in the Caribbean” at the State University of New York -UWI Center for Leadership and Sustainable Development in the Caribbean Symposium, Professor Bourne said the policy comprised mainly of bilateral and multi lateral lobbying aimed at improving understanding of the Caribbean situation and creating sufficient goodwill for reversal of the trend towards de-risking in the Caribbean. However, he said central to the Caribbean policy response should be considerations of bank profitability, which is the main driver of de-risking through withdrawal of correspondent banking services. Professor Bourne said compliance risks, compliance costs and costs of monitoring incurred by correspondent banks are important elements in their profitability calculations.
Delivering the address on February 13, Professor Bourne said, “There has been widespread disruption of correspondent banking services provided to Caribbean countries by international banks located primarily in US, Canada and Europe. Countries particularly affected are Anti gua and Barbuda, Bahamas, Barbados, Belize, Cayman Islands, Guyana, Haiti and Turks and Caicos Islands. Read more
Source: Newsday (Trinidad and Tobago)