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Symmonds: Face banking issues head-on

Article taken from the Weekend Nation – September 30,2022

Barbados and the Caribbean are risking social and financial turmoil unless greater attention is paid to a burgeoning financial crisis, warns Minister of Energy and Business Development Kerrie Symmonds.

Delivering the feature address on Wednesday during the Barbados International Business Association (BIBA) luncheon seminar at Savannah Beach Club Hotel, Hastings, Christ Church, Symmonds – who is also the Senior Minister coordinating the Productive Sectors, outlined an issue he said the region could not afford to ignore.

“I think the issue of financial derisking and correspondent banking is perhaps the greatest bugbear we are going to have to treat to. It is a matter of significant concern because from 2016/17, the World Bank has been sending signals to us and I am fairly sure we as a sector – and not only here in Barbados, but equally across the region – have been too timid in acknowledging the significance of this creeping problem,” he said.

The minister said he was “worried” the sector was remaining mute while the “slow but steady” march towards the diminution of correspondent banking relationships was taking place, adding the region had to raise its hands and say they were not willing to conform to this new norm.

He said the region had already lost 47 per cent of its correspondent banking relationships in comparison to 24 per cent worldwide, adding this could have a serious social impact.

“This is not just utilised by central banks and commercial houses but also by ordinary citizens. This is the way local currencies are able to be translated into international currencies and vice versa and that connectivity is what allows for small economies like ours to be able to accelerate their paths out of the difficulties forced upon them by the pandemic. It is a challenge small countries like ours have to confront.

“I’m already sensing where it can lead to social instability. The money transfer operators rely on the same correspondent banking relationships so if there are families in England or Canada who wish to send money back here to relatives living in difficult circumstances, then the inability to do so cuts people off and, as a consequence, they become a greater degree of a burden on an already overburdened social care sector,” he said.

Symmonds said Government was already raising awareness about the matter at the level of CARICOM and while there has been some satisfying movement, he called for everyone in the international business sector to take note and take action.

“There is simply too much talent in the global business sector for us not to recognise we have influence from here to as far as [North America] and the United Kingdom and beyond. We have to be prepared to voice our concerns over these types of existential threats,” he said. ( CA)

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