Frequently Asked Questions

1. What is de-risking?

According to the World Bank, “Global financial institutions are increasingly terminating or restricting business relationships with remittance companies and smaller local banks in certain regions of the world – a practice that is called “de-risking.””

2. What is the most affected region by de-risking?

The Caribbean appears to be the most affected region by the declining of Correspondent Banking Relationships (CBRs). According to the World Bank’s 2015 survey, 69 percent (32 banks) indicated a moderated or significant decline in CBRs.

3. What are the principal drivers for de-risking?

• Risk of non-compliance with local regulation.
• Difficulties to share customer’s information or lack of transparency.
• Respondent banks’ inefficient AML/CFT systems.
• Lack of deficient AML supervision.

4. What is the relation between supervision and de-risking?

When a financial system or financial institution, in particular, has a proper and efficient supervision, the correspondent banks trust in the supervisory bodies and reduces the possibility of de-risking.

Basel Core Principles establish that banks may decide not to work with certain economic sectors, this will not be a de-risking scenery when the FI and the supervisor agree on the ML/FT risk level of the economic sector.