A recent IMF report has indicated that Dominica is at risk of losing correspondent banking relations and Former IMF Economist, Dr. Thompson Fontaine, says this should be taken seriously.
In a press release issued on Friday, the IMF reported that the high level of non-performing loans and low capitalization across the financial industry poses risk to financial stability and there is also risk of losing correspondent banking relations, as is currently occurring in other countries in the region.
Correspondent banks are used by domestic banks in order to service transcations originating in foreign countries, and act as a domestic bank's agent abroad. However, with the threat of money laundering and claims that Caribbean banks are harbouring proceeds of criminals, they have started to shut down these banking relations. Dr. Fontaine weighed in on the matter on Q95's Hotseat Monday.
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