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Banking sector in crisis says Opposition Leader

During the press conference this morning, PUP Leader, Francis Fonseca, spoke about the banking sector in Belize, specifically what Fonseca describes as a “crisis in the banking sector” in Belize. Recently, Bank of America terminated its correspondent banking relationship with Atlantic Bank International. And previous to that, Bank of America terminated has also terminated is relationship with Belize Bank Limited. This latest move by Bank of America has affected offshore banking says Fonseca.

Francis Fonseca – Opposition Leader

“The reality is that off shore banks with no corresponding banks means no off shore banking sector. And the essence of off shore banking is the free flow of foreign currency primarily US dollars through the banks without any exchange control. This is akin to conducting banking business in the US but doing it outside of the US. Without these correspondent banks that we have been hearing about then you are forced to do banking essentially back in the United States which means that Belize off shore banks are no longer attractive and ultimately leads to a loss of skilled labor jobs in the banking sector.”

Fonseca says that funds that ended up in Belize’s offshore banks played an important role in tourism and agriculture industry in Belize.

Francis Fonseca – Opposition Leader

“This will all now dry up thereby negatively affecting these key industries in our economy and this will mean reduced investment in these industries and most certainly loss of jobs. And the loss of correspondent banks by domestic banks, this is critically important can have an even more severe adverse impact on our economy. We know that First Caribbean international bank is gone they are gone. Ordinary every day transactions may be impaired if not curtailed just the purchase of consumer items from abroad like imported food or imported electricity or fuel not to mention capital items like steel, cement and equipment will become difficult. Nowhere as you know very well, nowhere other than Belize is the Belize dollar accepted.”

According to Fonseca, Belize will not be able to pay for import with cash due to the rules and regulations concerning money laundering.

Francis Fonseca – Opposition Leader

” What we have to do and what the government’s obligation is to do and what the Central Bank’s obligation to do which they are not doing is to convince the United States and other developed jurisdictions and nations who are black listing us that Belize is not risky. If they agree that we are not risky then there is no de risking to be done it is as simple as that and that is where our government has been falling down and failing.”

Prime Minister, Dean Barrow, has been having meeting with representatives from Bank of America in order to find a way forward that would benefit both parties.