Loss of Correspondent Banking Relationships in the Caribbean: Trends, Impact, and Policy Options

47 Pages Posted: 25 Oct 2017

See all articles by Trevor Alleyne

Trevor Alleyne

International Monetary Fund (IMF)

Jacques Bouhga-Hagbe

International Monetary Fund (IMF) - Middle East and Central Asia Department

Thomas Dowling

International Monetary Fund (IMF) - Western Hemisphere Department

Dmitriy Kovtun

International Monetary Fund (IMF)

Alla Myrvoda

International Monetary Fund (IMF)

Joel Chiedu Okwuokei

International Monetary Fund (IMF)

Jarkko Turunen

International Monetary Fund

Date Written: September 2017

Abstract

Banks across the Caribbean have lost important Correspondent Banking Relationships (CBRs). The macroeconomic impact has so far been limited, in part because banks either have multiple relationships or have been successful in replacing lost CBRs. However, the cost of services has increased substantially, some services have been cut back, and some sectors have experienced reduced access. Policy options to address multiple drivers, including lower profitability and risk aversion by global banks, require tailored actions by several stakeholders.

Keywords: Dominica, Dominican Republic, Antigua and Barbuda, Asia and Pacific, Bahamas, The, Barbados, Small states, Grenada, Haiti, Western Hemisphere, Caribbean, Jamaica, Tax evasion, Trinidad and Tobago, Remittances, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Central banks and their policies, corrrespondent banking, AML/CFT, fintech, Government Policy and Regulation, Technological Change: Choices and Consequences

JEL Classification: E58, G21, G28, H26, O33, O54, G23

Suggested Citation

Alleyne, Trevor and Bouhga-Hagbe, Jacques and Dowling, Thomas and Kovtun, Dmitriy and Myrvoda, Alla and Chiedu Okwuokei, Joel and Turunen, Jarkko, Loss of Correspondent Banking Relationships in the Caribbean: Trends, Impact, and Policy Options (September 2017). IMF Working Paper No. 17/209, Available at SSRN: https://ssrn.com/abstract=3058594

Trevor Alleyne (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Jacques Bouhga-Hagbe

International Monetary Fund (IMF) - Middle East and Central Asia Department ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Thomas Dowling

International Monetary Fund (IMF) - Western Hemisphere Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Dmitriy Kovtun

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Alla Myrvoda

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Joel Chiedu Okwuokei

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Jarkko Turunen

International Monetary Fund ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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