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Re: PM Comments On Banking Sector Under Pressure [Re: Marty] #510701
01/15/16 12:49 PM
01/15/16 12:49 PM
Joined: Oct 1999
Posts: 59,021
oregon, spr
Marty Offline OP

.
Marty  Offline OP
GOB seeks urgent solution to bank crisis

The possibility that Belize may be cut off from doing business with the outside world is a very real problem government officials have, as Prime Minister Dean Barrow and Central Bank Governor Glenford Ysaguirre have both expressed concern over the ‘de-risking’ dilemma.

The loss of corresponding banking relationships poses a great threat to Belize’s banking and business sectors. “We are in a place we don’t want to be. If we don’t find a solution one way or another, it is going to be a huge crisis,” Barrow told the media this week.

The Prime Minister said he intends to meet with officials from the US State Department, the US Treasury, the Federal Deposit Insurance Corporation and the Office of the Controller of the Currency to see if there is a way to resolve the issue. The problem, however, is that the issue is not as clear cut as the government would hope.

Ysaguirre told the Reporter, this week, though the concern is very real indeed, it is important to understand that the issue is one affecting countries all across the region. According to Ysaguirre, he attended a conference hosted by the US Treasury Department in Panama in December and representatives from Mexico, Guatemala, Colombia and other Latin American nations also raised concern over the same issue. He added that Belize, being a smaller economy, will also feel the impacts of de-risking quicker and harder, hence the current urgency.

In effect, strict US and European anti-money laundering (AML) and counter-terrorism financing (CTF) laws have put immense pressure on international banks. These banks face stiff penalities if found in violation of any of these laws and have decided that the cost of penalties versus the margin of profit in doing business with small jurisdictions like Belize isn’t worth the risk, hence the term de-risking.

In a previous conversation with the Reporter on the issue, Political and Economic Section Chief for the US Embassy in Belize, J. Nathan Bland explained that this process of wholesale de-risking is not supported by the US Government. He further explained that the banks which are de-risking are all privately owned entities, so there is only so much to be done.

The nation first heard about ‘de-risking’ last April when the Belize Bank lost its correspondent bank relationship with the Bank of America. In July, Atlantic Bank International also lost its relationship. The impact was immediate. With the loss of an ability to do international banking, including wire-transfer capability, individuals, businesses and even large-scale importers were unable to pay for goods and services sourced abroad. On the flip side, local exporters experienced real difficulties in receiving payment from outside Belize for goods and services sold.

Since then, Atlantic Bank International has managed to re-establish correspondent bank relationships with the Bank of New York Mellon, Commerzbank and the US Century Bank. But there is more bad news on the horizon and this news will be further reaching. According to Barrow, “in the case of credit card settlements, it’s a community bank that has agreed to do that for Belize Bank and for Heritage after the corresponding banking relationship was cut off by Bank of America. That bank has now indicated that by the middle of next month it is looking to discontinue even that sort of less comprehensive relationship, so even the question of the credit card settlements is now in some jeopardy.”

The Belize Bank and Heritage Bank have explored relationships with ‘Tier 3’ banks outside of the US, but Prime Minister Barrow said even that hasn’t worked out particularly well, since pressure from the US remains the pivotal factor in establishing those crucial relationships – “what has happened in certainly one case – a small international bank, the bank from Turkey, engaged in a relationship with Heritage and then after a while said we can’t continue. And it is our fear that because all those banks in turn have to deal with the big banks in the U.S.; that the pressure ultimately continues to come from the U.S.”

The Prime Minister will embark on his round of meetings sooner rather than later, and while he expressed some optimism, he reminded reporters that he had discussed the matter with US President Barack Obama: “he had expressed his willingness to try and have the US help us find a solution. Nothing has happened.”

And while there is concern that credit card transactions may be affected, the Reporter has been able to confirm that the Belize Bank has secured ties with another international bank and its services will remain unaffected, at least for now.

The Reporter

Re: Banking Sector Under Pressure [Re: Marty] #510740
01/16/16 08:01 AM
01/16/16 08:01 AM
Joined: Oct 1999
Posts: 59,021
oregon, spr
Marty Offline OP

.
Marty  Offline OP
from a friend....

RE: credit card handling by Belize banks

from Hon.Barrows speech. Roughly quoted-we are not in an emergency yet. However Visa and Mastercharge have indicated they will not route US dollars after mid Feb.

1st tier banks are having heartburn in regards to continued off shore banking, pushed along by the IRS.

Channel 7 News quoted the Prime Minister on credit card transactions, in its online translation of their 12 January evening broadcast"

" In the case of credit card settlements, it's a community bank that has agreed to do that for Belize Bank and for Heritage after the corresponding banking relationship was cut off by Bank of America. That bank has now indicated that by the middle of next month it is looking to discontinue even that sort of less comprehensive relationship. So even the question of the credit card settlements, is now in some jeopardy"

Community bank is a 1st Tier bank as BankAmerica. US regulatory agencies brought Swiss accounts to the light of day, now they are going after Belize and others. Belize has thumbed its nose and now it is time to pay the piper. Visa and MC are part of the regulatory process. The globe speaks English, and for now the dollar is spoken financially.

Another way to access the notion... Ask Atlantic Bank what 1st Tier bank services the cards they issue- debit and credit?

==================
Response:

Atlantic Bank's press release and email to account holders name the same correspondent banks they have used for the last 20 years. I've had account there that long and recognize the correspondent bank names from setting up wire transfers, etc.

What I got from the quote attributed to the PM by Channel 7 is that "a community bank" (in Belize) has been processing Belize Banks international credit card transactions but that community bank's ability (or willingness?) to continue may come to an end ...or discontinue, I think he was quoted as saying.

That may not be accurate but based on the quote above and other statements released in recent months that seems what has been said for several months now.

========

My red flag was raised a couple of months ago after the Carib mtg when the PM opined that Bz trade$ are dependent on the offshore $. I believe that is the issue that the big banks have stuck in their craw. If the banks, named are "approved" then Heritage and Belize Bank are being taken out to the wood heap for attention. In that guess,then Atlantic Bank must be
clean of offshore. If not then,the wood heap is a matter of time. Hopefully cool heads can play ball,rather than gotcha

Re: Banking Sector Under Pressure [Re: Marty] #510755
01/17/16 03:20 AM
01/17/16 03:20 AM
Joined: Oct 1999
Posts: 59,021
oregon, spr
Marty Offline OP

.
Marty  Offline OP

Belize seeks urgent US intervention to avert banking crisis

Belize’s banking sector has been grappling with the domino effects of the decision taken by Bank of America and Commerzebank, two leading banks, to sever correspondent banking relations with both offshore and domestic banks in Belize.

Immediately, Belize banks had to find alternate arrangements to ensure that trade would not suddenly come to a screeching halt, but even those alternate arrangements now seem to be threatened, and latest information to the press is that credit card settlements could be in jeopardy, which would not just affect Belizeans conducting purchases at home and abroad, but also tourists trying to settle their transactions while in the country.

Prime Minister and Minister of Finance Dean Barrow told journalists this week that there is “…no doubt at all that we are absolutely facing what is an existential threat; and I am determined—as are the individual banks in this country—to ensure that we do everything that we possibly can and that we continue to go at this thing from every conceivable angle until we can find a lasting solution.”

He said that he has met with the US Ambassador to Belize to discuss the issue and through Belize’s Ambassador to the US he has been trying to arrange meetings with officials from the US State Department, the US Treasury, and the regulatory agencies – the US Office of the Controller of Currency and the Federal Deposit Insurance Corporation (FDIC). He plans to also seek interventions from the World Bank and the International Monetary Fund (IMF).

When Belize Bank, the country’s largest domestic bank, lost its correspondent banking relations with Bank of America last April and had to put in place alternative arrangements to serve customers, Belizeans were told that the impact only extended to transactions such as wire transfers, but that credit card settlements were not threatened. But less than a year later, things have apparently changed.

The wave of cutoffs of correspondent banking relations first began among the offshore banks in Belize, which have all been impacted, and then it made its way into the domestic banking sector, and particularly the local banks with international banking enterprises, with Belize Bank International being the first to take a hit.

Those banks have since worked out alternate correspondent banking relations with banks outside the US or with smaller community banks in the US, but even those banks, fearing repercussions brought by US authorities, are trying to shed their newly established relationships.

Barrow told the media this week that “…in the case of credit card settlements, it’s a community bank that had agreed to do that for Belize Bank and for Heritage [Bank], after the correspondent banking relationship was cut off by Bank of America. That bank has now indicated that by the middle of next month, it is looking to discontinue even that sort of less comprehensive relationship; so even the question of the credit card settlements is now in some jeopardy.”

“This is a problem that the international policy makers such as the US, the EU, the IMF, the World Bank are slow to acknowledge and act on; thus like us, a lot of other countries have visited Washington to spread awareness and seek an expeditious resolution,” Central Bank Governor, Glenford Ysaguirre, told Amandala today.

“It is potentially a crisis. In fact I don’t want to overstate things but if we don’t find a solution one way or another it is going to be a huge crisis,” Barrow told the media this week, when he announced his intent to visit Washington to discuss the situation with key officials there.

Barrow said that when he raised the issue with US President Barack Obama, the president had expressed his willingness to try and have the US help Belize find a solution, but so far, nothing has happened.

Barrow said that, “…government now is going to step up the official effort to try to get some kind of progress out of US regulators, out of the US public sector and out of the US tier one banks.”

“After losing Bank of America, three of those banks were able to make arrangements with a smaller US bank to handle the net settlement of their credit card activities with Visa, Master Card and other electronic payment companies,” Ysaguirre explained.

“For example, our local banks are affiliates of these credit card companies and are thus authorized to issue credit cards to their customers and offer point of sale (pos) services to merchants to accept credit card payments under the Visa and Master Card logo.

“However, they must maintain an account in the US to receive their net inflows or settle the net outflows, whatever the case may be, with Visa or MC. It is these three banks that the PM referred to that may lose those credit card settlement accounts,” Ysaguirre further stated.

Ysaguirre told us that the Central Bank of Belize (CBB) is doing its best to work with and assist banks in Belize to cope with the situation.

“We have some options we are exploring to mitigate further impact if necessary, but I do not wish to discuss them at this juncture,” he indicated.

The Governor assured that, “The Government, the CBB and the Belizean banking community are working assiduously and very proactively to address this issue on all fronts—politically, diplomatically and operationally.”

While it has been said that Belize is the hardest hit, Ysaguirre told us, “Just last week, I received information from a CARICOM colleague that said [that] Barclays London intends to sever ties with all Jamaica.”

He added that, “Perhaps, due to the size of our market [in Belize] and because most of our banks had only [Bank of America] the impact has been pronounced for us. But, I can say that money transfer businesses in the Caribbean—which is a larger part of their economy than ours—are just as hard hit by de-risking.”

Barrow, who is chairing CARICOM from January to June 2016, said that the question of correspondent banking relationships would feature very prominently on the agenda for the Heads of Government meeting due to be held in Placencia, Stann Creek, Belize, next month.

Amandala


Re: Banking Sector Under Pressure [Re: Marty] #510784
01/18/16 07:14 AM
01/18/16 07:14 AM
Joined: Jul 2010
Posts: 1,355
San Pedro, Belize
Judyann H. Offline
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Judyann H.  Offline
Isn't this interesting.....Now American Travelers won't be able to use their credit cards 'world wide' ..... I would think that VISA & Mastercard Corporations would find a solution......Hopefully they get it worked out.... Even though we have not been in the US for nearly 4 consecutive years the US government continues to keep tabs on every penny we have. From our required bank account reports (FATCA) to filing our Annual IRS returns.... Some days I wonder if they are just a bit put out that we left..... (me feeling important) wink


My friends call me Judyann

www.blackorchidrestaurant.com
Re: Banking Sector Under Pressure [Re: Judyann H.] #510787
01/18/16 07:26 AM
01/18/16 07:26 AM
Joined: Mar 2001
Posts: 2,665
Illinois, Arkansas,South Dakot...
bywarren Offline
.
bywarren  Offline
You can always renounce your US citizenship if you feel it is too burdisome.

Re: Banking Sector Under Pressure [Re: Marty] #510788
01/18/16 07:37 AM
01/18/16 07:37 AM
Joined: Feb 2015
Posts: 371
USA
Shyboy Offline
.
Shyboy  Offline
No; reining in our US Government might be a better solution.


A little known fact... Women who are overweight tend to live longer than men who mention it...
Re: Banking Sector Under Pressure [Re: Shyboy] #510789
01/18/16 07:47 AM
01/18/16 07:47 AM
Joined: Mar 2001
Posts: 2,665
Illinois, Arkansas,South Dakot...
bywarren Offline
.
bywarren  Offline
I am not sure Goverment attempts to curb money laundering and insuring taxes owed are paid is an area the Goverment should be reigned in on. There seems to be ample other areas to focus on.

Re: Banking Sector Under Pressure [Re: Marty] #510792
01/18/16 08:05 AM
01/18/16 08:05 AM
Joined: Jul 2010
Posts: 1,355
San Pedro, Belize
Judyann H. Offline
.
Judyann H.  Offline
I'm not sure if I need to say this, however I now feel obligated as it has come up.....We do pay our taxes, and we do not launder money...(unless a bill ends up in my washing machine smile ) ......Our first year in Belize we were audited again for the 5th year in a row. Not once has there been an adjustment on our returns....Until this last audit....Turns out they owed us....On our book shelf sits a US Treasury check for $2.37...Turned out we overpaid that year....It's not a big deal that they keep tabs on us or our stuff, the big inconvenience will come if we can no longer accept US issued VISA/Mastercard at our Restaurant.


My friends call me Judyann

www.blackorchidrestaurant.com
Re: Banking Sector Under Pressure [Re: Judyann H.] #510794
01/18/16 08:15 AM
01/18/16 08:15 AM
Joined: Mar 2001
Posts: 2,665
Illinois, Arkansas,South Dakot...
bywarren Offline
.
bywarren  Offline
"the big inconvenience will come if we can no longer accept US issued VISA/Mastercard at our Restaurant"
Welcome to living in Belize.

Re: Banking Sector Under Pressure [Re: Marty] #510795
01/18/16 08:19 AM
01/18/16 08:19 AM
Joined: Jul 2010
Posts: 1,355
San Pedro, Belize
Judyann H. Offline
.
Judyann H.  Offline
Awwww bywarren, we love our life in Belize and have weathered through lots of inconveniences....Wouldn't change a thing.....Yes, we feel welcomed and privileged to live in Belize


My friends call me Judyann

www.blackorchidrestaurant.com
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