Worried about the threat posed to their vulnerable economies, Barbados and other Caribbean financial jurisdictions are preparing to take their concerns about corresppondent banking to the hemispheric level in Washington this week.
The issue is at the heart of a declaration that is due to go before the Permanent Council of the 34-member Organisation of American States (OAS) on Wednesday.
The declaration, which is being sponsored Antigua and Barbuda, and supported by the delegations of Bahamas, Barbados, Belize, St Lucia, and St Vincent and the Grenadines, seeks to raise awareness of the gravity of the situation that has seen some global banks severing ties with commercial banks in some members states.
“[This] poses a severe threat to the economic growth, social development and political stability especially of small economies by curtailing their ability to participate in standard international financial and economic transactions,” the draft declaration states.
It also points to the need for “urgent” action to ensure that banking regulations, which were designed to foster transparency and accountability and to prevent money laundering and terrorism financing, do not result in financial exclusion and economic decline of small economies by cutting their access to international correspondent banks.
“Considering the adverse impact of unsustainable debt burden on the development of member states, the serious threat posed to the financial stability of member states by the de-risking strategies applied by the global banks which threaten correspondent banking relations and the regulatory and economic challenges stemming from disparate tax information exchange standards throughout the hemisphere,” the declaration further states.
It recognizes the ongoing work of the United Nations and the call made in the Monterrey Consensus of the International Conference on Financing for Development for greater coordination of the work of the concerned multilateral bodies and relevant organizations giving special attention to the needs of developing countries.
The declaration also highlights the OAS’s role in facilitating hemispheric dialogue towards addressing developmental challenges facing its member states.
The meeting to be chaired by Antigua and Barbuda’s ambassador Sir Ronald Sanders will be addressed by Ryan Pinder, member of parliament of the Bahamas; Dr Farah Diva Urrutia, director general for legal affairs and treaties of the ministry of foreign affairs of the Republic of Panama; Bruce Zagaris, partner in the Washington, D.C. firm of Berliner, Corcoran & Rowe LLP and Daniel Mitchell, senior fellow with CATO Institute.