Finance Minister Audley Shaw is urging international banks to end what he says is the indiscriminate practice of withdrawing their services to local and regional financial institutions due to unspecified concerns about money laundering.
The trend of recent withdrawals has been referred to by some observers as the ‘correspondent banking crisis.’
Shaw is calling for an international lobby to highlight the risk to Jamaica and other Caribbean countries.
He says the emerging bank crisis will create more informality in the Jamaican economy.
Minister Shaw says Jamaica is willing to follow international rules, but a crucial service as correspondent banking cannot be withdrawn indiscriminately.
Minister Shaw was speaking recently at the 2016 ‘Outlook for the Future’ forum, hosted by the Jamaica National Building Society,JNBS, in the United Kingdom.
Correspondent banking is critical to small developing economies due to its facilitation of trade investments and remittances.
Correspondent banks are used by local financial institutions to facilitate transactions originating in foreign countries.
They act as a domestic bank’s overseas agent.