Consequently, USD clearing has been terminated or restricted in several countries. This has in turn further weakened some local economies. The report also stated that there are concerns that de-risking has resulted in the creation of new, informal channels. Money is now flowing through these channels, driving financial transactions outside regulated channels. This development could potentially undermine AML/CFT objectives.
One of the suggested avenues in the World Bank Report to address the issue is to establish or maintain open channels of communication between correspondent and respondent banks. The aim is to increase the awareness of both correspondent and respondent banks on the country context and their respective AML/CFT concerns. The initiative of Standard Chartered Bank to host today’s event is indeed commendable.