How Global Banks “De-risking” their Correspondent
Banking Portfolios is Isolating Emerging African
Economies from the Global Financial System

Thandiwe Vilakazi
ABSA Corporate and Investment Banking

 

Summary

Global banks are “de-risking” correspondent banking relationships and the unintended consequence is that they are threatening Africa’s access to the global economy. Global regulators are cracking down on commercial crime by issuing heavy fines against banks that do not have adequate Know Your Client (KYC) and Anti-Money Laundering (AML) processes in place. “De-risking is also contributing to the major funding gap across sectors in Africa. Costs to borrow funds are quite high, which in turn slows down development By be becoming more rigorous and transparent about their compliance processes African banks may be able to reduce the likelihood of being “de-risked” or increase their chances of securing alternative arrangements if they are “de-Risked” by global banks. Download the full article