Like other Caribbean economies, Finance Minister Winston Jordan, recently stated that Guyana faces a potentially damaging correspondent banking crisis.Finance Minister,Cheap China Jerseys, Winston JordanThe economist, during the presentation of the 2017 budget, noted that the local banks and financial institutions of small Caribbean economies rely heavily on correspondent banking relationships with global banks to connect with the international financial network.He said that these relationships allow local residents to receive remittances from abroad,Cheap Soccer Jerseys, tourists to access cash from their home accounts, and facilitate the transfer of funds needed to support trade and investment in the region.The Finance Minister said that recently, concerns about meeting new, stricter rules related to Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) have led correspondent banks to terminate their relationships with their local partners, a practice termed “de-risking”.While this trend has affected countries around the globe, the Finance Minister said that the small economies of the Caribbean have been hit especially hard. Jordan said that while foreign-owned banks operating in Guyana have not been subject to de-risking,Discount NFL Jerseys, locally-owned banks have been severely affected by de-risking, losing in the aggregate,Wholesale China Jerseys, approximately 37 percent of correspondent relationships by the end of June last.Jordan said that thus far, only one bank has been able to establish new correspondent relationships to cover about 75 percent of those that were lost.The Finance Minister noted, however, that if this trend continues,Wholesale NFL Jerseys China, financial transaction services may become more costly and more limited, and legitimate transactions may go underground. He said that such a state of affairs would encourage the use of cash and increasing other forms of informality at a time when Government is attempting to deepen financial inclusion.The economist said that the end result is likely to undermine the efforts to supervise and regulate the financial sector and fight money laundering and combat the financing of terrorism.The Finance Minister said that Guyana, in partnership with other Caribbean economies and international institutions such as the International Monetary Fund (IMF) and World Bank, is working to address the threat posed by de-risking.He said that this is being done through both advocacy and addressing the perceived risks that lead international banks to sever correspondent banking relationships.The Finance Minister said that Guyana has enhanced compliance with the implementation of recommendations by the Financial Action Task Force (FATF) and the Financial Stability Board (FSB). He stressed that it is critical that international banks work with local banks to transfer practices that reduce risk, rather than severing relationships.In the meantime, the issue of de-risking remains under the watchful eye of the Bank of Guyana and the Ministry of Finance. According to Central Bank Governor, Dr. Gobind Ganga, Guyana’s financial system has been threatened by de-risking with Bank of America giving notice to a few banks of its intention to cease doing business with them.He said that although other banks showed an interest to fill the void,NFL Jerseys From China, the conduct of international banks to terminate correspondent relations with legitimate clients (banks and non-banks) as a way of mitigating legal and other risks can be detrimental to the economic and financial health of economies such as Guyana.Giving his point of view on the effects of the financial challenge, Dr. Ganga said that de-risking curtailed countries’ access to essential cross-border financial services such as trade finance and international money transfers, which are essential for growth and development.Through May 2016, at least 16 banks across five countries in the Caribbean have lost all or some of their correspondent banking relationships.