Wednesday, February 3, 2016 Capital Weekly Page 1 No. 046 Wednesday, February 3, 2016 Online Publication Break or Breakthough? PM’s Intervention To Avert Banking Crisis e-risking by interna- clearly communicate that to US tional US banks and banks seeking to do business the consequent loss of with domestic banks in Belize. correspondent bank- The Prime Minister noted Ding arrangements is the number that while the large US banks one issue currently confronting are perhaps concluding that the Belize. Having just returned financial reward derived from home from a trip to the United doing business with small juris- States where he headed a high dictions like Belize is not worth level delegation to resolve the the cost of complying with the matter, Prime Minister Hon. new regulatory measures, there Dean Barrow summoned the are smaller US banks that are media to a press conference to prepared to enter into such cor- update the nation on what was respondent relationships, and achieved and what the current Prime Minister Hon. Dean Barrow flanked by Financial Secretary that our local banks are pursu- situation is. The Prime Minister Joseph Waight and Central Bank Governor Glenford Ysaguirre ing such new arrangements. informed that he and his delega- He said the assurances from tion met with top officials from the US regulatory authorities De-Risking or Destruction? the US Office of the Comptroller will go a long way in facilitating of the Currency (OCC), specifi- this, and that he and his team Neither is Fair - Sir Ronald Saudners cally, Mr. Thomas F. Curry; the are prepared to further assist. Federal Deposit Insurance Cor- Mr. Barrow described the representatives of the US govern- poration (FDIC); and the Secre- mission as a success, as he and ment and regulatory agencies. tary of Treasury, Mr. Jacob Lew. his delegation were assured it is Of all the Caribbean PM Barrow says they all certainly NOT in the interest of countries, Belize has been the indicated they are pleased that the United States Government to hardest hit by US banks terminat- Belize is doing what it can to see our banking system collapse. ing correspondent relations. But, address the issues that the regu- The Prime Minister was accom- other Caribbean countries are also feeling the squeeze of what latory measures are intended panied by Financial Secretary is obscurely called “de-risking”. to combat, including money Joseph Waight, Central Bank Indeed, the problem is so acute laundering and financing of ter- Governor Glenford Ysaguirre, that no foot-dragging on the is- rorism. He said they indicated Belize’s Ambassador to Wash- sue could be excused. The matter they are satisfied that Belize ington, H.E. Patrick Andrews, should be the highest priority for is a safe jurisdiction and will and Ambassador Mark Espat. Sir Ronald Saunders regional governments, diplomats and the entire private sector, not f there were any scheme only banks for whom the issue designed to destroy has become one of immediacy. HOULDER HOULDER the economies of sev- Even as the Belize Prime S to S eral countries with- Minister was knocking on Wash- “Iout a military war, then this is ington doors that were closed un- TRENGTH TRENGTH such a scheme. It is erroneous; til mid-week because of a snow S to S it is pernicious; and it is vicious”. storm, Antigua and Barbuda’s That was how Antigua and Gaston Brown was explaining Barbuda’s Prime Minister Gas- to his colleague heads of Latin ton Browne described the way in American and Caribbean govern- which US banks, under pressure ments at a Summit meeting in from US regulatory agencies, are Ecuador that “the economies of cutting off correspondent rela- many of our countries, particu- tions with Caribbean indigenous larly in the Caribbean, now face a and offshore banks unilater- serious threat to our banking and ally and with very little notice. financial system”. He explained No wonder then that the that the region has been brand- Prime Minister of Belize, Deane ed a “high risk area” for financial Barrow, who restricts travelling to services and added that “this al- the minimum because of spinal legation has been made without challenges, was in Washington a shred of evidence to support it, Story on Page 5 DC for much of the week begin- and without any consideration of ning January 25th to meet senior Continued on Page 2 New Soldiers of the Belize Defence Force (BDF) Page 2 Capital Weekly Wednesday, February 3, 2016 De-Risking or Destruction? EDITORIAL Neither is Fair - Sir Ronald Saudners Continued from Page 1 its grave effects on our countries”. Summoning The Spirit of 2009 The Belize Prime Minister had earlier warned that US de-risking he threats and challenges con- was causing a crisis in the Eastern Caribbean and that the region’s fronting the domestic financial financial and trade architecture cannot survive the withdrawal of sector, as it pertains to de-risking U.S. correspondent relationships. and loss of correspondent bank- These two Prime Minis- Ting, are real and potentially disastrous to ters had been the principal in- a few channels being available terlocutors when regional heads to a respondent bank, thus be- the nation and its economy. But, as Prime of government met US President coming dangerously dependent Barack Obama last April in Jamai- on only a few or sometimes just Minister Dean Barrow has emphasized in ca. At that time Caribbean lead- one institution”. In fact, many the National Assembly, press conferences ers understood President Obama Caribbean banks are now in the to have committed to examine dangerous situation of having and interviews with the local media, it is their complaints and to explore only one correspondent bank in ways in which the governments the US, and then only tenuously. important that we NOT exaggerate the could work together to resolve the The report also went on magnitude of the actual harm being done. issue. However, no word has been to urge that “large international forthcoming from US authorities. banks that are the providers of We must also be realistic and truthful, Instead, last April, Bank foreign correspondent banking as the Prime Minister was back in 2009 when of America, which has a wide net- services should consider plac- work of correspondent relations ing appropriate credit and other he informed the nation that the global reces- with banks throughout the Carib- limits/conditions on their cli- bean, cancelled its correspondent ent banks, rather than terminat- sion had hit home. As the PM indicated back banking operation with the do- ing the relationships”. That has then, we would enter with eyes wide open mestic and international branch- not happened so far. The effect, es of the Belize Bank. Since then, as Antigua and Barbuda’s Prime and successfully navigate our way through it has closed – or given notice Minister said, will be: “first, remit- the turbulent waters of economic recession of terminating – relations with tances from our diaspora which banks throughout the region. are important to the foreign ex- without swallowing the bitter pill of the IMF. Prime Minister Browne, change earnings and the welfare without naming any US bank, of the poor in our society, will be Against the global backdrop of protracted, said in Ecuador that the unfair adversely affected; second, busi- economic contraction and negative growth, branding of the Caribbean as a nesses will not be able to pay for “high risk” area “made repeatedly the goods and services which they our endurance and recovery was remarkable. by representatives of the United import and which are necessary Just as we weathered the storm of reces- States Government and Congress for human existence; third, the – and in the European Union – tourism industry on which many sion, so can we stave off the potential disas- has frightened the financial regu- of our countries are reliant will latory bodies and the financial be fatally injured when payments ter of de-risking that threatens our banking institutions in the US especially. cannot be made and revenues re- sector – by summoning up the spirit of 2009! In turn, the regulatory bodies in ceived, and fourth, sooner rather the US have falsely warned their than later, our indigenous banks banks that the Caribbean is a “high and offshore financial sectors will risk area” for financial services. collapse and close down, causing Threatened with huge fines if one all of the problems that I have just minor incident of money laun- described, in addition to adding Johnny Is Back! dering escapes their scrutiny, the to unemployment and the break- Briceno garnered 1,125 US banks have been intimidated down of our financial system”. votes, defeating incumbent into severing correspondent re- The Prime Minister of Be- lations with Caribbean banks”. Leader Hon. Francis Fonseca lize has been beating the streets No less an institution who received 918 votes, and in Washington while the Prime than the World Bank has put its Minister of Antigua and Barbuda Hon. Cordel Hyde who got 673 name to a report that describes has been beating the drum to votes. Henry Charles Usher was the threats that “de-risking” Latin American and Caribbean retuned as Party Chairman. poses to Caribbean financial in- leaders with a strong message: Other executives elected were stitutions. “Withdrawal from “If the industrialised countries, Correspondent Banking; Where, Jose Abelardo Mai as North- such as the US and the Europe- Why, and What to Do About it” ern Deputy Leader, Rodwell an Union, sincerely care about was prepared by the Finance and the development of our area Ferguson as Southern Deputy Markets Global Practice unit of and the well-being of our peo- Leader, and Anthony Mahler the World Bank Group.