BELMOPAN, Mon. Aug. 1, 2016–Belize Finance Minister Dean Barrow told the media today that “the system is being choked,” in consequence of de-risking, which, he said, has been having a knock-on effect in Belize. Barrow made the comments in response to a question over the schemes ran by the man known as William Mason in Belize, who had allegedly been approached to facilitate transfers into US accounts.
Barrow said that while he does not know that de-risking is the cause of these types of informal transactions, it appears that they have become “more voluminous.”
Since last year, several Belize-based banks have been cut off by foreign banks which had been providing correspondent banking services to Belize. Barrow said today that two banks had completely lost all correspondent banking relations, but today, one bank has been able to secure a formal arrangement, leaving just one bank without formal correspondent banking relations.
On Friday, Barrow told the media that it was the country’s largest bank, the Belize Bank, which had still not secured a solid correspondent banking partnership.
Last week, it had been revealed that the correspondent banking fiasco had also contributed to a pull on the country’s US dollar reserves for two reasons. Some foreign investors are demanding US currency to take their money out of Belize, and secondly, revenues that would normally come to Belize from tourism, despite a double-digit growth for the first half of the year, have fallen far short of expectations.
However, Barrow told the press on Friday that currently there is no foreign exchange problem, but, he said, “there is a bit of tightness in the system, that has to do more with the loss of correspondent banking relationships and the difficulties, the sort of round tripping almost or the circuitous journey; that for example credit card settlements, payments in US dollars must make before they come back into the country, since some banks, in particular the Belize Bank—the largest bank by market share—does not have a proper correspondent banking relationship.”