Europe’s ‘Retreat’ Outpaces Latin Growth For Bahamas

• The Bahamian international banking sector is contracting because the “retreat” of European assets is “outpacing” new growth from Latin America. That’s the proclamation from the Central Bank governor.
• John Rolle, in written replies to Tribune Business questions, acknowledged that the financial services industry has yet to regain momentum following two decades of scrutiny and regulatory pressures imposed by major world powers such as the Organisation for Economic Co-Operation and Development (OECD).
• In responding to the industry’s needs, the Central Bank has worked with industry and government to help introduce newly regulated products such as private trust companies (PTCs) and executive entities, which allow financial institutions to use additional regulated vehicles to serve their client needs. The use of these vehicles has increased over the last decade.
• “The retreat of the European business summarises the response to heightened scrutiny that international financial centres like The Bahamas have faced over at least two straight decades around anti-money laundering and tax transparency standards,” Mr Rolle stated.
• The development has continued despite The Bahamas’ removal from the Financial Action Task Force (FATF) List of Countries that have been identified as having strategic Anti-Money Laundering (AML) deficiencies back in 2020. The country was also de-listed from the European Union’s Blacklist in January 2022.
• In this regard, the Central Bank and other regulators continue to work to improve the jurisdiction’s anti-money laundering profile through national efforts to secure peer assessments that validate the effective and compliant standing of The Bahamas against the rest of the world.
• These measures include direct outreach to correspondent banks to ensure more accurate assessments of anti-money laundering risk management practices and an annual anti-money laundering research conference. These will aid banks and trust companies in maintaining solid correspondent banking relations, which are essential to the viability of their business models.

(Source: The Tribune)