Belize: Selected Issues Paper

IMF Staff Country Reports, November 16, 2018

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Belize: Selected Issues Paper

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Bibliographic details

• Published: November 16, 2018
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9781484385470.002

Correspondent Banking Relationships (CBR) — Main Findings

• The paper analyzes Belize’s correspondent banking relationships (CBR) using a dataset based on a bank-level survey and the IMF staff’s minimum scope framework.
• All affected banks have found some replacement CBRs and alternative ways of processing cross border transactions.
• Pressures from the loss of correspondent banking relationships appeared to be easing.
• The US dollar continued to dominate CBR transactions, but its share has been declining.
• CBR pressures appear to be easing but risks remain.

Risks and Vulnerabilities

• Identified risks:
  • CBR counterparty credit risk.
  • CBR withdrawal risk.
  • Remaining supervisory gaps which could potentially add to CBR pressures.
• The importance of CBR in supporting economic activity and financial stability is highlighted.

Implications for Credit and Economic Activity

• The results of the study are consistent with the view that the recovery in CBRs in Belize will support credit growth and economic activity.

Policy Recommendations and Institutional Measures

• Ensure the availability and timely access to beneficial ownership of legal persons and arrangements established in Belize to:
  • Limit the opportunity for their misuse.
  • Improve the transparency and the reputation of the sector.

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