Finance minister admits that de-risking will see the death of some offshore banks; pundits say the close-down was in train for some time

As a consequence of de-risking, some offshore banks in Antigua and Barbuda
are taking a serious hit and seeing their profitability and viability decline, says
Finance Minister Gaston Browne.

In banking, de-risking “refers to financial institutions closing the accounts of
clients perceived as high risk for money laundering or terrorist-financing
abuse – namely, money-service businesses, non-profit organizations,
correspondent banks, and foreign embassies.”
 
During a radio outing on Saturday, June 1, Brown noted that, due to these
constraints, offshore banks that once were profitable have lost significant
business because they are not able “to move money” – in, particular, to receive
deposits – into their institutions.

Accordingly, he says that de-risking has reduced the country’s offshore
sector– which was never very large – to “nothing.”
Browne says the future of those banks now hangs in the balance; and because
they are not onshore institutions and regulated by the Eastern Caribbean
Central Bank (ECCB) – which is accorded more respect than the local
regulators – they may not survive.

None of this comes as any surprise to pundits who have been following
developments in the banking industry these past years, since the major
Canadian banks sold their operations here.

Prior to that, they remind the public, a major money-transfer company had
suspended its business in Antigua and Barbuda with little notice or credible
explanation to the public here. At the time, there were speculations that the
company had been used to facilitate suspicious transactions.