The Caribbean, more than any other region in the world, now faces a threat that has severe implications for its economic viability. This threat is the termination of Correspondent Banking Relationships (CBRs). Amidst concerns about money laundering and the financing of terrorism (ML/FT), several correspondent banks have been terminating or restricting business relationships with clients or categories of clients to avoid, rather than manage, the inherent risk. This action, referred to as ‘de-risking’ or ‘de-banking’, is a challenge that requires urgent and coordinated action from Caribbean economic, regulatory, and political leadership. This report therefore examines the underlying drivers of de-risking in the Caribbean, examines the impact of de-risking on the region, and proposes measures that can be taken to help to address the problem.
