The process of ‘derisking’ is underway by international financial firms that are withdrawing from sectors within the Caribbean region and elsewhere that represent compliance risks. It is a situation where a number of banks, having assessed the present circumstances, deem it too risky to persist with certain customers and activities, since the risk outweighs the benefit. Bankers have cited lines of businesses they were reviewing amid an enforcement crackdown and rising penalties for sanction violations. In 2012, HSBC paid a one point nine billion dollar fine to settle U.S charges over anti-money laundering lapses. Since then the bank has reevaluated its risk exposure in areas such as money services businesses, charities, embassies and correspondent banking relationships. The issue also came up recently at the Seventh Summit of the Americas meeting in Panama where Prime Minister Barrow spoke in person with U.S. President Barack Obama concerning the effects derisking will have on the economies of Central American and Caribbean countries. We asked the Financial Sectary, Joe Waight for an update.

Joseph Waight, Financial Secretary

“The prime minister reported that he had a one-on-one with [President Obama] and he spoke on behalf of SICA with President Obama who promised to follow up when he got back home to Washington. We’re hoping that he will make a difference, but it’s not only Belize, it’s the entire region. The banks are pulling out, they’re saying that for the small money that they get out of the Caribbean, the fines and the risks are just too large and they’re pulling away.”

It remains unclear tonight if Belize is being affected directly as a result of the pulling away of correspondent banks.

Channel 5