Dear Editor,
Self-employed self-starters, across a range of industries, continue to dream about having access to global payment providers, such as PayPal or Stripe. It is a dream that many are living elsewhere. For example, overseas-based Guyanese are the only ones capable of easily implementing apps that contain payment integrations. This has the effect of shutting out local developers from the market for local apps! Networks of banks guarantee the balances that are held in PayPal accounts. When payment platform-supporting banking networks deem certain regions as “high risk”, citizens in those regions do not benefit from the services that make life easier for millions of people across the world. The addition of correspondent banking in the Caribbean can support such an inclusion, and facilitate so much more.
Earlier this month, The U.S. House Committee on Financial Services received testimonies on the importance of addressing Caribbean financial inclusion issues. The absence of correspondent banking arrangements was the key issue. The opening testimony was emphatically delivered by Prime Minister Mottley of Barbados. The testimonies were delivered by individuals representing a range of global and regional organizations. Among the five, was Wazim Mowla, a Guyanese American and the Assistant Director of the Carib-bean Initiative. Video of the complete session can be found online, under the title: “When Banks Leave: The Impacts of De-Risking on the Caribbean and Strategies for Ensuring Financial Access.” Banks operating in regions deemed as having “high financial risk” can face devastating consequences if they fail to comply with anti-money laundering regulations. These regulations are set out by federal financial regulators in the United States. The Caribbean, including Guyana, is one such region.
The consequence of this relationship between federal regulators and local banks, is that many hard-working people are shut out from the basic human right of having a bank account. This means, that many are shut out from the right to save and therefore the right to grow financially. To avoid the punitive measures of federal financial regulators in the US, local banks take a defensive position and put up barriers to accessing bank services. One such barrier is having to provide “proof of income” in order to open a simple bank account. Far too few of us are aware of how bad this situation really is and what it implies. The testimonies presented to the US House Committee on Financial Services, included overwhelming evidence that anti-money laundering regulations do not stop the funding of terrorism, nor do they stop or inhibit criminal activities.
Furthermore, as Prime Minister Mottley stated in her testimony, FBI traces of illicit finance more often lead to banks operating in major city-centers in the Global North, inclusive of Luxemburg, New York and Lon-don. The Caribbean is almost never implicated, yet banks consistently maintain the perception of high risk in the region, through their internal reporting mechanisms. As a result, our citizens cannot exercise their basic right to savings and their right to other kinds of wealth-creating financial services. A case of a few bad apples, and not in the same basket! Editor, it is clear that the issue of financial inclusion is complex and multi-faceted.
One letter can scarcely suffice. I therefore ask that you permit me space none-the-less, as it is important to highlight that uninformed federal financial regulation continues to be one of the most critical issues affecting the development of our people. So much depends on the ability to open a bank account and the ability to save. Furthermore, high unemployment and especially high youth unemployment have little to do with the attitudes of youth, as some columnists heave through their mouths, and more to do with the issues of world order and the structures of our economy – subjects that very few write about for the general audience.
Sincerely,
Emille Giddings
