At the preliminary meeting before the 7th Summit of the Americas convened last week in Panama, Prime Minister of Belize Dean Barrow told his counterparts that under pressure from internal regulators, major banks in the United States are “de-risking” in response to strict anti-money laundering regulations and ending their correspondent relationships with domestic banks. It has not yet become a major problem in Belize, but has become so elsewhere, so much so that U.S. President Barack Obama heard several entreaties from regional leaders in both Jamaica and Panama. Today the PM said Obama has made a proposal in regard to the issue.
“They are de-risking, the term that I use and is commonly employed. Obama, accepted that this, if its followed through to its logical conclusion, would completely throttle the economies of small countries. As I said, you can’t be there with all this mighty, noble soaring rhetoric about prosperity and stability if you’re going to place us in a situation where our economies cant survive. He undertook to do something about it. That undertaking given to me was clearly one that he had also given to President Varela of Panama and to the CARICOM heads in Jamaica. We met afterwards, a number of us, Antigua, Dominican Republic, Haiti, Belize, Bahamas, Panama was not present, but I suggested and it was agreed that the Antiguan president, since he was the one who spoke to it in Jamaica, ought to write a follow up to Obama and that President Varela ought to write a follow up letter to Obama just recording that he had given us certain undertakings in terms of helping us to solve the issue And that we should then, as a group, continue to meet after we get the response from Obama, then we are able to observe over the next month of two, whether there has been and noticeable change in terms of the posture of the correspondent banks.”
In regards to Belize’s situation, the Prime Minister said he wanted to avert any potential crisis.
“I want to make clear that it is not yet a crisis in Belize. We sense what might be coming and therefore we speak out one time but the banks here still have corresponding banking relationships. If there is going to be some rush to the exits, it appears that first of all the international bank, the offshore banks are the ones that would be first to see the plug pulled but even that has not yet happened although there are these ominous mutterings – these rumblings. While we can’t fall asleep at the switch – while it is a very urgent and important matter, I don’t want to overstate the case that the crisis has already occurred and that we are looking at the collapse of the banking system No! Not there yet, not by a long shot. We just want to make sure that we never get there.”