Challenges in Correspondent Banking in the Small States of the Pacific

Author/Editor:

Jihad Alwazir ; Fazurin Jamaludin ; Dongyeol Lee ; Niamh Sheridan ; Patrizia Tumbarello

Publication Date:

April 7, 2017

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

Access to financial services in the small states of the Pacific is being eroded. Weaknesses in Anti-Money Laundering and Combating the Financing of Terrorism compliance in the context of high levels of remittances are contributing to banks’ decisions to withdraw corresponding banking relationships and close bank accounts of money transfer operators. In this paper, we gather evidence on these developments in the small states of the Pacific, discuss the main drivers, and the potentially negative impact on the financial sector and macroeconomy. We then identify the collective efforts needed to address the consequences of withdrawal of corresponding banking relationships and outline policy measures to help the affected countries mitigate the impact.

Series:

Working Paper No. 17/90

Subject:

English

Publication Date:

April 7, 2017

ISBN/ISSN:

9781475593471/1018-5941

Stock No:

WPIEA2017090

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

29

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