Prime Minister Dean Borrow left the country on Saturday to attend special meetings with Government and banking officials in Washington D.C concerning the problem being faced by the Belizean banking sector as it relates to the correspondent relationships and the recent de-risking moves taken by bigger US banks.
Prime Minister Borrow accompanied by financial secretary, Mr. Joseph Waight, the Governor of the Central Bank of Belize, Mr. Glenford Ysaguirre and Ambassadors Patrick Andrews and Mark Espat are scheduled to have meetings with key Senior officials of the United States Federal Government and with the U.S. banking monitoring systems to discuss possible solutions for the dilemma faced by the banking sector.
For some months the banking sector in Belize has been facing a difficult process where big US banks are cutting off their correspondent banking relationship with Belizean banks. Bank of America and many of the larger banks are undergoing what is called de-risking which is when they close off ties from clients perceived as high risk for money laundering or terrorist financing in small countries like Belize. Banks like the Belize Bank, Belize Bank International, Atlantic International Bank and Heritage Bank have seen themselves affected by this occurrence.
At the first sitting of the House of Representatives on Friday this matter was widely discussed and the first one to bring up the topic was PUP Representative Kareem Musa who voiced his concern when it comes to the effects on Belize’s economy and the business sector.
Hon. Kareem Musa, Area Representative, Caribbean Shores
“I speaking in particular about the loss of correspondent banking relations, Mr. speaker is no doubt an issue that affects businessmen and businesswomen not only from my constituency from Caribbean Shores but from all of our constituencies it is in fact a very crippling effect it has had in our economy, debilitating to the point where it is no longer possible to do business and I am speaking Mr. speaker the purchase of goods and services from the United States and elsewhere and I am speaking about the use of credit cards I am speaking about remittances that come home to our Belizean families from abroad that is the effect that it has had on our economy, a terrible effect and we need Mr. Speaker for this issues to be addressed.”
After the House Sitting on Friday in an interview with the media PM spoke about the issue, clarifying that the issue with the banks in Belize has nothing to do with Belize being affiliated with money laundering or anything of the sort.
Hon. Dean Borrow- Prime Minister
“All this is against the back drop in the context of the authorities in the States and globally being concerned about money laundering, financing and perusing and all that sort of thing so I didn’t mean to suggest that you are raising an issue but I just don’t want for the kind of connection to be made with that larger background scenario and the particular action that have been taken with respect to Belize so that the official line from the banks; Bank of America, all the others is that the regulatory burden that US authorities have been posed on them simply makes it not cost effective to continue to do business.”
PM also spoke about current solutions that local banks are looking into as alternatives.
Hon. Dean Borrow- Prime Minister
“We are going to be aiming now at trying to engage in these new relationships with smaller banks for whom it will not be as onerous for whom it will make rather more economic sense to do business in Belize since they are not so big as to be able to simply turn up their nose at business in Belize.”