Central Bank Loses Citibank to Derisking

On the Phone: Glenford Ysaguirre

For the past couple months, the issue of de-risking has been placed on the backburner as other pressing national issues, including the Sarstoon and the B.T.L. arbitration award, have taken center stage in public discourse.  But the focus tonight is once again on the loss of correspondent banking relations.  This time, the Central Bank of Belize, the country’s financial watchdog, has seen its affiliation with Citibank being severed.  The withdrawal of Citibank is one less option for business on the international market; however, its exit is not expected to affect the local banking sector.  According to Governor Glen Ysaguirre, Citibank is the second of two correspondent banks to sever ties with Central Bank.

On the phone: Glen Ysaguirre, Governor, Central Bank of Belize

“We have to appreciate that the IMF is presented dated information that took place in the last 12 months. I think you guys, the press is already aware, or were already aware of the withdrawal of Commerce Bank, Commerce Bank is the German Bank and it has withdrawn from Belize some time in 2015 and o think that was well publicized. The only other bank that has withdrawn its services from the Central Bank; and I don’t think it had any relationship with any of the commercial banks in Belize was Citibank. And it severed its relationship with us, I gave us notice about 90 days ago and that period ended sometime in early June and so those could only be what the IMF report would have been referring to.”

Isani Cayetano

“Has the central bank established another partner relation with another corresponding bank?”

On the phone: Glen Ysaguirre

“No we have a relationship with Bank of America and we have relationships with several other banks but not for correspondence banking services, for investment purposes.”

Isani Cayetano

“What does this withdrawal mean for the local financial sector? I know you mentioned this is particularly…”

On the phone: Glen Ysaguirre

“I am not aware that it will mean anything for the banks, the commercial banks because I am not aware if any of them had relationship with Citibank and if they too were terminated, I don’t know, I don’t have any knowledge of that, I hadn’t have any indication that, that is the case. So for them I don’t think it will mean anything, for the Central Bank, what it mean is that we have one less option but I think that the issue with Citibank for us was that it was a relationship we had for many years and we weren’t making much use of it. We had it as a kind of backup kind of relationship. Our main correspondent bank is Bank of America and I think they indicated to us that the volume that we were doing with them was not significant enough for them to maintain the relationship given the extra they now must incur to mean compliance for providing correspondent banking services.”