The Trend Of “De-Risking” In International Finance and Its Impact on Small Island Developing States
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This rapid review synthesises the literature from academic sources, knowledge institutions, non-governmental organisations (NGOs), and trusted independent media outlets on the challenges small island development states (SIDS) face when they lose correspondent banking relationships (CBRs). The rapid review concludes that, although the loss of CBRs is a global phenomenon, regions with SIDS, such as the Pacific and Caribbean, have seen the highest rates of withdrawals. During the last decade, local and regional banks in SIDS have lost and continue to lose bank accounts at large global banks to a critical level, sometimes having only one or none CBRs with banks in major economies, such as the Unites States, the United Kingdom, the European Union or Australia. This means that local banks have reduced access to financial services related to cross-border financial transactions, impacting on remittances and trade finance.
CitationQuak, E. (2022). The Trend Of “De-Risking” In International Finance and Its Impact on Small Island Developing States. K4D Helpdesk Report no.1162. Brighton, UK: Institute of Development Studies. DOI: 10.19088/K4D.2022.079
Is part of seriesK4D Helpdesk Report;1162
Rights holder© Crown copyright 2022
SponsorForeign, Commonwealth and Development Office (FCDO)
- K4D