Loss of Correspondent Banking Relationships in the Caribbean : Trends, Impact, and Policy Options

Author/Editor:

Trevor Serge Coleridge Alleyne ; Jacques Bouhga-Hagbe ; Thomas Dowling ; Dmitriy Kovtun ; Alla Myrvoda ; Joel Chiedu Okwuokei ; Jarkko Turunen

Publication Date:

September 29, 2017

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

Banks across the Caribbean have lost important Correspondent Banking Relationships (CBRs). The macroeconomic impact has so far been limited, in part because banks either have multiple relationships or have been successful in replacing lost CBRs. However, the cost of services has increased substantially, some services have been cut back, and some sectors have experienced reduced access. Policy options to address multiple drivers, including lower profitability and risk aversion by global banks, require tailored actions by several stakeholders.