BARBADOS — As the Caribbean struggles to respond to de-risking and other challenges in its financial sector, at least one Caribbean prime minister believes the solutions can be found through closer economic ties with Africa.
Caribbean countries have been arguing that de-risking — the threat by banks in developed countries to withdraw correspondent banking services — would exclude the region from the global finance and trading systems with severe consequences for financial stability, economic growth, remittance flows and poverty alleviation.
At the same time, the region is trying to cope with excess liquidity, and in some countries, such as Barbados, commercial banks are paying as little as 0.01 per cent interest per annum on deposits.
Canadian banks are selling most of their assets in the Caribbean. On Thursday, Royal Bank of Canada (RBC) announced it had entered into definitive agreements to sell all banking operations in the Eastern Caribbean to a consortium of indigenous banks within the region. The move by RBC follows a similar action by another Canadian-based bank, Scotiabank, to sell off its operations in at least eight Caribbean jurisdictions.
Barbados Prime Minister Mia Mottley, addressing the inaugural business summit of the 79-member African, Caribbean and Pacific Group of States (ACP) last Sunday, said that the concept of de-risking has come about “because the Canadian banks don’t believe that they are large enough to matter for them to take the time to put systems in place. See BARBADOS TODAY for full story at https://barbadostoday.bb/2019/12/16/take-down-the-walls-that-separate-us-mottley-pm-calls-for-more-collaboration-among-african-caribbean-and-pacific-states/?fbclid=IwAR1AR6Vu6BN123SPc7zTnM7R1qlRXm0cdtl8aeb87NyLVTPj2cjjVD0bXbs
