Mia Mottley Talks De-risking and Correspondent Banking at U.S. Congress

Mia Mottley

Prime Minister Mia Amor Mottley testified before the United States’ House Committee on Financial Services, on the impact of de-risking in the Caribbean.  For several years, the issue of correspondent banking, in light of stringent measures taken by financial institutions to terminate or restrict business relationships with clients or categories of clients to avoid, rather than manage risk, has been one of concern for several countries within the region.  Testimony of the Prime Minister of Barbados earlier today, marked the first time in nearly forty years that a prime minister has testified before Congress.

Mia Mottley, Prime Minister, Barbados

“Our economies cannot function on their own.  We do not make enough clothes, we do not produce our own food, we do not produce our own equipment and therefore, unless we are able to trade with the rest of the world we are at risk of becoming financial pariahs.  We are here because the listing process that has taken place whether through the Financial Action Task Force or the OECD or further, as a result of actions taken for enhanced due diligence by those who take the listings from the FATF and the OECD.  It means that those correspondent banks, over the course of the last ten to twelve years have made a judgment that we are simply too small, as I’ve just told you, in order to get involved because the enhanced due diligence means increased cost of regulation, increased cost of compliance.  And, rather than do business with us, they say thank you, but no thank you.  What it has meant is that almost every country in our region over the course of the last decade with the exception of two or three have had a loss of more than thirty percent of their correspondent banking relationships.  The truth is that we have also seen others use alternative mechanisms, as the ranking member just appropriately referred to in his opening statement, and therefore what we face is a situation that the very thing that you set out to achieve which is the avoidance of terrorism financing, the avoidance of money laundering, on which we are all agreed, is likely to happen because you are driving people underground.  There is no benefit in driving our citizens underground or making our countries uncompetitive such that our economies are at risk of becoming underdeveloped or failed states.”