Loss of Correspondent Banking Relationships in the Caribbean: Trends, Impact, and Policy Options

Trevor Alleyne, Jacques Bouhga-Hagbe, Thomas Dowling, Dmitriy Kovtun, Alla Myrvoda, Joel Chiedu Okwuokei and Jarkko Turunen

No 2017/209, IMF Working Papers from International Monetary Fund

Abstract: Banks across the Caribbean have lost important Correspondent Banking Relationships (CBRs). The macroeconomic impact has so far been limited, in part because banks either have multiple relationships or have been successful in replacing lost CBRs. However, the cost of services has increased substantially, some services have been cut back, and some sectors have experienced reduced access. Policy options to address multiple drivers, including lower profitability and risk aversion by global banks, require tailored actions by several stakeholders.

Keywords: WP; respondent bank; BIS bank liability; bank service; CBR transaction; central bank; Caribbean; small states; corrrespondent banking; AML/CFT; remittances; fintech; loss of CBR; banks in the Caribbean; Correspondent banking; Anti-money laundering and combating the financing of terrorism (AML/CFT); Offshore financial centers; Commercial banks; Compliance costs; Global (search for similar items in EconPapers)
Pages: 46
Date: 2017-09-29
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