23 April 2015
Several large American and European banks have recently decided to cut ties with select institutions in small developing countries, a decision that appears to be correlated with the imposition of heavy regulatory fines for infractions associated with the recent global financial crisis and violations of geo-political embargoes. The new strategy of these institutions involves a reduction in the scope of global operations to minimize the probability of incurring further sanctions and fines, a process known as “de-risking”. This is the context within which Belize Bank Limited and Belize Bank International Limited are losing foreign correspondent banking relationships.
The public is informed that Belize’s other domestic banks (ScotiaBank Belize Ltd., Atlantic Bank Ltd., First Caribbean International Bank Ltd. and Heritage Bank Ltd.), all of which are authorized by the Central Bank of Belize to deal in foreign exchange, have not been affected. The Central Bank has been working closely with the Bankers Association to manage the situation and to ensure that international banking services to the general public are not unduly hindered. The public is therefore advised that the aforementioned banks will continue to conduct foreign exchange transactions (including wire transfers, bank drafts, letters of credit and bank guarantees) and that Belize Bank Ltd. will be making its reserves of foreign exchange available to the Central Bank to ensure that the needs of its customers and that of the rest of the domestic system will be served. Belize Bank Ltd. has also provided an assurance that all its other banking services (including credit card issuance and merchant acquiring services) will be continuing as usual while it continues to seek ties with other foreign correspondent institutions.
The public should note that on a diplomatic level, the Belizean authorities and its regional partners are continuing to engage in discussions with the US authorities and financial institutions to draw attention to the potentially disruptive effects of the de-risking strategy of large banks on small, trade dependent economies. In the meanwhile, questions may be directed to the officials of their respective banks or to Mrs. Julia Perera, Deputy Director Foreign Exchange, Central Bank of Belize.
Office of the Governor T: (501) 223 6221 F: (501) 223 6222