||Central Bank Of Barbados
Recent changes in the strategies of leading international commercial banks, involving the sale of subsidiaries, withdrawal from providing some types of banking services, and the closure of client accounts, were the subject of great attention during the recently concluded Annual Meetings of the IMF and World Bank, held in Washington DC. Barbados and other Caribbean countries have been affected, along with countries in Africa, Asia, the Pacific, the Middle East and Latin America. Members of the Barbados delegation to the meetings, which was led by Minister of Finance the Honourable Christopher Sinckler, attended several fora on this topic, including meetings attended by the Managing Director of the IMF, Madame Christine Lagarde, the US Secretary of the Treasury Jacob Lew, and the Governor of the Bank of England, Dr. Mark Carney.
The strategies of the banks, often referred to as "de-risking", are in response to fines some banks have been subject to, damage to banks' reputations, the burden of information banks are obliged to collect from every customer, and the additional capital they are required to hold in order to comply with international regulations. These factors all add up to a cost of doing business which is well in excess of the profit that can be made in certain markets. Banks which find themselves in this position have no option but to withdraw, because the business activities concerned will fail, sooner or later, as they continue to make losses.
In his contribution to the discussion, Governor of the Central Bank of Barbados Dr. DeLisle Worrell thanked the IMF, World Bank and other institutions for having created opportunities for small economies like those of the Caribbean to offer their views on this crucial topic. He pointed to the competitive strengths of Barbados' international business and financial services sector, and the high quality of our regulatory framework. He mentioned that Transparency International's score for Barbados, 74 out of 100, is the same as for the US.
The "de-risking" problem is still growing, and the measures that have been suggested so far have done little to attenuate the potential damage which banks might suffer. Studies are underway to explore the full dimensions of the issue, and the implications for international finance, equitable treatment, and access to financial services. Follow-up discussions will be held under the auspices of international financial institutions, including the IMF, the World Bank and the Financial Stability Board.
Other issues discussed during the annual meeting of Caribbean Ministers and Governors with
Madame Lagarde included growth prospects for the Caribbean, fiscal sustainability, and
investment in the green economy. The way to accelerate Caribbean economic growth in the
face of the global slowdown is to focus on those niches where the Caribbean brand is strong.
Further gains can be made by intensifying the use of renewable energy sources, and exploiting
other economic opportunities in the green economy.
The delegation met with IMF Staff to provide updates on the Barbados economy and the
expected impact of the fiscal measures approved by our Parliament in August. Meetings on the
economy were also held with investors, business journalists, international financial experts and
representatives of international organisations. Members of the Barbados delegation attended
seminars organised by the IMF, the World Bank, the Inter-American Development Bank, the
Commonwealth Secretariat and others. Several sessions focused on the challenges faced by
small states, including climate change and the potential use of technology to create greater
efficiency and productivity, such as the application of varied fintech solutions and blockchain
The Barbados delegation included Central Bank Governor Dr. DeLisle Worrell, and staff of the
Ministry of Economic Affairs and the Central Bank. They were assisted by staff of the Executive
Directors' offices of the Bank and Fund, and by the staff of the Barbados embassy in
October 13, 2016