Passions ran high as money transfer businesses and smaller financial institutions met yesterday at the Commonwealth Secretariat to address a “detrimental” decline in international banking for many businesses and individuals.
The public meeting was convened to discuss the report, Disconnecting from Global Finance, which proposes solutions to the trend of financial institutions terminating or restricting so-called correspondent banking relationships (CBRs) with legitimate clients as a way of mitigating legal risks. This practice, which is a response in part to increased regulation, is known as ‘de-risking’.
“Major banks are now avoiding banking customers, or categories of customers, they deem low profit or high risk. The drivers are complex and varied but global regulations that are designed to stop money laundering and the financing of terrorism have contributed to this worrying phenomenon,” said Commonwealth Economic Policy expert Samantha Attridge, Head of Finance and Development Policy. Full Story