Antigua advocates need for Caribbean bank to deal with corresponding banking

Antigua and Barbuda Prime Minister Gaston Browne yesterday called for the establishment of a Caribbean bank that would allow the region to counteract the position of international banks regarding corresponding banking.

Caribbean countries have been arguing that the threat by banks in developed countries to withdraw correspondent banking services would exclude the region from the global finance and trading system with grave consequences for maintenance of financial stability, economic growth, remittance flows, and poverty alleviation.

Browne, who is leading the region’s response to the issue, told the Caribbean Media Corporation (CMC) that the region has been making “slow progress” on dealing with the matter.

“But at the same time there’s still a problem. The corresponding banks continue to take this policy of risk and return, so as far as they are concerned the banks in the OECS (Organisation of Eastern Caribbean States), in particular, are too small and they are in essence looking to bank larger banks within the region, which then forces us to consolidate to have bigger banks.

There may even be the need for us to have a Caribbean bank, that is a bank that is owned by various indigenous banks in the Caribbean and one that could have branches in the US Diaspora, UK Diaspora (and) Canadian diaspora in order to provide services to the Caribbean in the diaspora.”

He said such an initiative would allow for the provision of corresponding banking in the region, especially the smaller ones.

“My understanding is that there is an informal threshold about a billions US dollars, so that generally speaking, banks that have less than a billion US dollars would almost be not bankable for corresponding banking”.

The Antigua and Barbuda prime minister, who is here to attend the 40th meeting of Caribbean Community (Caricom) leaders, said the irony of the entire situation is that “most of our banks, have less than one billion US in assets.

Share