The Central Bank of Barbados (CBB) is taking steps to ensure that commercial banks don’t go overboard, to the detriment of customers, when applying anti-money laundering regulations.
Governor Dr Kevin Greenidge said on Tuesday that the CBB has been meeting with the banks on this matter, noting that consideration must be given to the impact which “overly zealous” application of measures could have on customers doing business with these financial institutions.
“We have been working with the banks to ensure they still meet the level of anti-money laundering regulatory measures that are needed to ensure that we are covering our bases…but also ensuring that we are not getting overly zealous about the application of rules for [making] rules sake,” Dr Greenidge told Barbados TODAY in a telephone interview from Cairo, Egypt where he is attending the Intra-African Trade Fair 2023 that ends on Wednesday.
He said even though commercial banks and other financial institutions have their own rules, the Central Bank, as the regulator, also issues standard guidelines to the system to say what must be done while working in harmony with those entities.
“Of course, you know, the customer is very important…and making sure you understand the source of funds and so on, but you shouldn’t hinder the ability to open accounts once everything is legit, etcetera. So, we have been having working meetings with the banks on that. So, it’s not a major issue at the moment in my view,” the central bank governor said.
Reporting on the recently-ended 61st Bi-Annual Meeting of CARICOM Central Bank Governors in Jamaica, Dr Greenidge, who was chosen to chair the Committee of Central Bank Governors for next year said his selection was “very significant”.
The Director of the International Monetary Fund’s (IMF) Western Hemisphere Department, Rodrigo Valdes also led a delegation to the Jamaica meeting, at which the CARICOM central bank governors exchanged views with the representatives from the Washington-based institution.
Dr Greenidge noted that the discussions focused on improving small states’ access to multilateral financing and the IMF’s potential role in assisting CARICOM develop a regional capital market, particularly for climate change adaptation and resilience financing.
He said that while the IMF’s Resilience and Sustainable Trust (RST) fund which provides 20-year financing for climate change adaptation is the “only game in town”, the problem is that it’s tied to quotas.
“I was one of the persons who said ‘let’s incorporate some measure of vulnerability into the index’. I made that point that we are always hit by some sort of shock…and I made a tongue-in-cheek comment that the crisis doesn’t ask ‘what is your quota’ and then hit you proportionately,” Dr Greenidge told Barbados TODAY. “So, my suggestion was not only incorporating vulnerability but . . . let’s not try to do a big complex measure of vulnerability; let’s keep it very simple . . . . Let’s say a simple vulnerability index like…if a country is hit by a shock that has the potential of wiping out at least five per cent of its GDP, then that country is vulnerable. Let’s incorporate a simple measure like that into the qualifying criteria to allow you to be able to borrow along those lines.”
emmanueljoseph@barbadostoday.bb
