De-risking raises Caribbean banking dilemmas

Subject

The impact of bank de-risking.

Significance

De-risking issues affecting the Caribbean reflect banks' re-assessment of their business models and risk exposures amid heightened regulatory attention to compliance by banks and their correspondents with global Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) guidelines. In the region, the phenomenon has led to strengthened efforts and progress in meeting the guidelines, but gaps and deficiencies remain.

Impacts

• A negative impact on the banking sector will affect employment and investment.
• Countries such as Haiti will be deeply dependent on technical assistance to improve compliance.
• Consolidation of compliance efforts in the Eastern Caribbean may improve effectiveness.