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Negative effects of “de-risking” banks discussed at Commonwealth headquarters

9 June 2016

Jamaica’s Minister of Finance and Public Service, Audley Shaw, has met in London with the Secretary-General of the Commonwealth, Patricia Scotland, to discuss strict new banking procedures designed to combat money laundering and the financing of terrorism.

They focused on the unintended economic consequences and negative impact that these “de-risking” measures are having on Jamaica and other countries with less developed economies.  Many banks, for example, are reluctant to provide services to money transfer businesses, because of the perceived level of risk associated with the remittances sector. This can negatively affect migrants working in developed economies sending money to their homes in less-developed countries.

They are concerned that efforts by Jamaica and other small states with vulnerable economies to build their resilience are being undermined because they are subjected to banking measures that were never aimed at legitimate financial transactions. They agreed that many indices of vulnerability fail to take into account the full range of factors that add to the fragility of countries such as Jamaica.

Minister Shaw congratulated the Secretary-General on the speed with which she had begun to deliver benefits of Commonwealth membership in the eight weeks since she took office. He welcomed her determination to introduce mechanisms so that Commonwealth countries can readily exchange know-how and good practice with others. This will mean that Commonwealth governments will be more aware of what has or has not worked elsewhere in comparable circumstances, and also have channels for drawing on expertise and technical assistance.

Minister Shaw said he could see great opportunities for learning from one another, and for cost-savings through sharing knowledge and templates for practical action in areas such as Information and Communication Technology, healthcare services, banking, as well as legislative and regulatory reform.

Secretary-General Scotland explained that her aim is to put the ‘common’ into ‘wealth’, and the ‘wealth’ into Commonwealth, and set out her plans for an Office of Criminal and Civil Justice Reform. She said that there would be much that Jamaica could offer fellow Commonwealth member states in the Caribbean and more widely thanks to the Common Law and similar systems of justice, governance and administration. 

Following his meeting with the Secretary-General, Minister Shaw was lead panellist at a Commonwealth High-Level Seminar on ‘Governance for Sustainable Development: Supporting the Implementation of the Sustainable Development Goals’.