MAXINE WATERS VOWS TO HELP THE CARIBBEAN

A senior American politician has vowed to assist Caribbean islands, as correspondent banks withdraw their services from financial sectors regionally.

Congresswoman Maxine Waters, the co-chair of the Congressional Caribbean Caucus — the group that acts as the “contact for the Caribbean Community” and includes Congresswomen Yvette Clarke and Stacey Plaskett — said the group is working to address the issue.

A correspondent bank is a financial institution that provides services on behalf of another financial institution. Usually domiciled in the United States of America, Europe, and Canada, these banks facilitate wire transfers, conduct business transactions, accept deposits, and gather documents on behalf of the other institution.

In an effort to reduce reputational risks, some banks have threatened to cut ties with banks across the region as a move towards de-risking. The banks are seeking to comply with international regulations, particularly relating to criminal activity such as money-laundering, fraud, and terrorist financing.

But Waters, in addressing a gala hosted by the People’s National Party’s Women’s Movement in honour of Portia Simpson Miller last Saturday at Spanish Court, The Worthington, expressed her commitment to assist the region.

“It has been brought to my attention that Caribbean countries are deeply concerned about correspondent banking at this time and the diminishing availability of corresponding accounts. Such accounts are used to facilitate remittances, trade and finance and currency exchange, and are essential to economic development and the free flow of legitimate transactions across international borders,” she said.

“As a ranking member of the House Financial Services Committee, I will be working with my colleagues in the Congressional Caribbean Caucus and the Congressional Black Caucus to address the impact of the diminishing availability of correspondent accounts on the countries of the Caribbean,” she continued.

She noted that a letter was sent to the State Department and that the group “is now in the process of identifying higher management” in banks to engage in discussion.

“…I do think that many of them (managers) have made decisions at lower levels simply because they feel it’s inconvenient; they don’t want to have to think that they have to pay attention to the bank secrecy laws. So I’m going to be talking with the CEOs of some of our biggest banks about this issue,” Waters said.

The congresswoman also told patrons that her team is seeking to engage community and minority banks as an alternative, which she pointed out could prove advantageous for such institutions.

Highlighting that she has been avoiding communication with President Donald Trump’s Administration, the congresswoman noted her commitment to the matter.

“I have not been contacting members of our Administration. I’ve not been contacting those who are serving as secretaries in our various agencies and serve as part of the president’s Cabinet, and I think if you’ve been keeping up with the news you know why. But I want you to know that there are times when you make such decisions ,that you may have to divert or change if something happens that is so important to you that you need to do exactly what you thought you would not do. And so this issue is extremely important to me and to the Caribbean and to Jamaica, and so I will overturn my decision not to talk to any of them and I will talk to them on this correspondent banking issue.”

“So just in the way that we joined with Portia [Simpson Miller] in order to deal with the IMF (International Monetary Fund) and the World Bank, we’re gonna take this issue very seriously and we’re gonna deal with it in the same fashion and the same manner. There will be no doubt that the Congressional Black Caucus is committed to supporting and standing with the Caribbean, and that of course includes Jamaica,” she said.

The IMF last year labelled the move of correspondent banks “a significant threat to the Caribbean economies”. Deputy Managing Director Tao Zhang, in his opening remarks at the 2016 High Level Caribbean Forum in Port of Spain, Trinidad, said the banks’ withdrawal “presents a clear and present danger for the Caribbean”.

He is quoted in an article on the IMF’s website as saying that “without these banking relationships, businesses are cut off from international trade and financing, families are unable to collect remittances from relatives working abroad, and foreign investors may be unwilling to invest if there is a risk they will be unable to repatriate their profits.

The article pointed out that a survey conducted by the Caribbean Association of Banks showed that 12 countries in the region experienced the loss of correspondent banking, among them The Bahamas, Belize, Guyana, Jamaica, Suriname, Trinidad and Tobago and the countries in the Eastern Caribbean Currency Union.