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Barrow and Biden chat about Belize’s correspondent banking debacle

HeadlineBarrow and Biden chat about Belize’s correspondent banking debacle

BELIZE CITY, Mon. Jan. 18, 2016–The “existential threat” to Belize’s banking sector, which could trigger dire consequences as early as next month if foreign financial institutions proceed to axe credit card settlement services for at least two of Belize’s commercial banks, remains on the front burner, and while there was a lot of social chatter at the inauguration of Guatemala’s new president, Jimmy Morales, Prime Minister Dean Barrow seized the opportunity to also address what many fear could be a looming crisis.

At that event, Barrow was seated beside US Vice President Joe Biden, and the two seemed to talk quite a bit during the proceedings.

“He promised he will do what he can [to address the banking issue] when he gets back to Washington,” said Barrow.

The Prime Minister noted that ahead of his trip to Guatemala, he had already secured appointments, via Belize’s diplomatic mission in Washington, with the US Treasury and the Office of the Controller of Currency.

Barrow said that Biden also indicated that while he is slated to be away when Barrow visits Washington, he should return towards the tail end of the mission, at which time he would be in touch to let him know what he would have been able to do on his part, but also to find out about how Barrow’s meetings would have progressed in Washington.

Barrow said that he first raised the issue when the region’s leaders met in Panama at the Summit of the Americas. As Amandala readers will recall, when the summit was held last April, Barrow got the attention of the international community when he sounded the alarm over the threats faced by banks in Belize and other parts of the Caribbean.

Barrow said that “…even as we speak, there is a crisis in my own country and in several others in the Eastern Caribbean, where the big US banks are ‘de-risking’ by terminating their correspondent relationships with our domestic banks.

“Indeed, even our Central Banks are being cut off, and our financial and trade architecture cannot survive this phenomenon. It is a reality that therefore threatens to make a mockery of the soaring rhetoric about stability, security and prosperity, sure to be employed at tomorrow’s Summit.”

At the end of that month, Bank of America severed relations with the first domestic bank in Belize to take a hit – the Belize Bank, which is also the largest commercial bank operating in Belize. Despite assurances that the Belize Bank was the only one that would be impacted, due to “a business model mismatch,” other Belize banks—both offshore and onshore—met a similar fate and had to scurry to find alternate banking arrangements with smaller overseas banks. This ensured that customers could still process wire transfers using US currency, and that foreign trade would not be impaired.

Barrow said that even back then, at the Panama meeting, he was able to discuss the issue with US President Barack Obama, in a forum where he was meeting with all the SICA (Central American Integration System) heads.

Barrow said that it is on record and Obama’s answers are on record, that he had promised—having also been alerted about the situation when he traveled to meet with CARICOM officials in Jamaica, just prior to the Summit—that “he would get right on it…”

Barrow said that despite preliminary discussions, “the situation has not gotten any better, so we have to continue to go at it,” with the next step being direct face-to-face conversations “with the actual movers and shakers in this area.”

Barrow said that in his upcoming meetings, the dates of which have not yet been announced, he hopes that two things can happen: that there will be clarity from the US side, and that the problems—whatever they are—can be addressed.

“It’s not going to be easy,” he warned.

Barrow said that for Belize, it is critical, and intervention is necessary to avert the collapse of banks in Belize and dire impacts on foreign trade, as well as money transfers to Belize from people in the diaspora.

“It is required to make sure that we never get there and the time to act is now…” Barrow expressed.

(Interview by Marisol Amaya, KREM TV news editor, for Amandala.)

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