President and chief executive officer of the Trinidad-based Republic Financial Holdings Limited (RFHL), Nigel Baptiste, said Wednesday that while the size of the financial institution has shielded it from the direct negative consequences of de-risking by correspondent banks, it is not immune to the impact.
“Throughout the Caribbean, our clients and my colleagues in the various countries lament the adverse effect of the loss or lack of financial access on the conduct of regular daily transactions,” he told the roundtable discussion on De-Risking and Correspondent Banking that was chaired by Prime Minister Mia Mottley and United States Congresswoman Maxine Water, chair of the US House Committee on Financial Services, and attended by several Caribbean Community (CARICOM) leaders.
Baptiste, whose RHFL has interests in several CARICOM countries, said even where financial institutions “have not lost access with our correspondent banks, we have had to self-regulate and, in so doing, restrict access to our network by many individuals, most of whom tend to fall into the marginalised communities in our society”.
“This is unfortunate but necessary because financial institutions in the Caribbean are presented with no choice. We either de-risk our clients or be de-risked ourselves,” he said.
Baptiste said he hoped the roundtable initiative would become the “next step in making the objective of financial inclusivity a reality”.
“Our view is that we are all stronger together. The collective is more powerful if we each individually are strengthened . . . . I am looking forward to concrete actions being agreed upon to achieve our mutual objective,” he said.
Over the past several years, most Caribbean governments and banks have seen a steady decline in correspondent banking relationships as institutions across the world deem the region too small to be profitable due to high compliance costs, and the perception that the region is a high-risk jurisdiction. (BT/CMC)
