Another matter raised by the opposition at today’s house meeting is the matter of bank de-risking. The matter was raised by the area representative for Caribbean shores Prime Minister Dean Barrow also responded to those statements saying that Government has been addressing the issue and said that Hon. Kareem Musa exaggerated the matter when he said that credit card problems exist. He said that he and a delegation are headed to Washington this weekend to address the de-risking issues.
Prime Minister Dean Barrow: The official line from the banks…Bank of America and all the others, is that the regulatory burden that US authorities have imposed on them simply makes it not cost effective to continue to do business in our small jurisdictions. I believe for the last full year that Bank of America was correspondent bank for the Belize Bank the total value of that relationship to Bank of America may have been like six million dollars. That’s the type of money Bank of America makes in a minute, quicker than you can sneeze. The regulatory officials in the states say to them…look, you have to with respect to your compliance requirements dot every I and cross every T and do the type of due diligence that requires on a continuing basis a sort of day to say surveillance of the banks with which you’re doing correspondent business. Bank of America says well fine, the cost of doing that is such that it’s not worth it. In the end I will pay more to discharge my prudential regulatory requirements than I will make from the banks in Belize, so I put the relationship at an end. That’s why some of the banks have gone the route of having fostered new relationships with smaller banks such as this Community Federal Savings Bank in New York that’s doing the credit card settlements. It makes rather more sense for them but you can see how the larger banks such as Bank of America, Commerzbank and Bank of New York and Wells Fargo would not have any interest any longer in doing business in small jurisdictions such as Belize. That is why it is such a hard problem to sort out.