How to stem the withdrawal of correspondent banking from Africa?
African countries are feeling the consequences of stricter enforcement of international standards on anti-money laundering and countering the financing of terrorism. So argued Dr Emily Jones in a recent discussion with African Central Bank Governors during their Annual Roundtable at the Centre for the Study African Economies, University of Oxford on 1 July 2015.
While the aims of these standards are laudable, they are having substantial adverse effects. The recent de-risking by global banks in the wake of stricter enforcement of international standards is leading to the withdrawal of correspondent banking relationships in Africa, impeding remittance flows that are vital for many economies and African citizens. Moreover, and less discussed in media headlines, resource-stretched African governments and domestic banks are incurring substantial compliance costs. She argued that there is a strong case for revising the standards to minimize their adverse effects.