Commitments to keep the Pacific connected to global banking systems will shape next steps from the inaugural Pacific Banking Forum in Brisbane this week.
The Forum, organised by Australia and the United States in partnership with the Pacific Islands Forum, has ended with an Outcomes document to be tabled at the upcoming Forum Economic Ministers Meeting in Suva later this month.
Pacific Heads of State, Treasury Officials, Financial Stakeholders from Central Banks, Global Financial Institutions, Regional and local banks, and International Development Partners were amongst those at the historic meeting, which has committed to ensuring Pacific people, businesses, and governments can reclaim equitable access to global financial services and transactions. Following the high-level meeting, officials met to discuss Anti-Money Laundering and Counter-Terrorism Financing initiatives.
The post-Forum focus on enhancing regulatory frameworks, sharing best practices, and addressing emerging challenges in combating financial crime across the Pacific region will help to address strong regional concerns shared by Forum Chair, Cook Islands Prime Minister Mark Brown.
Speaking to the impact of compliance for Pacific Forum members, PM Brown noted the region had seen the fastest withdrawal of Correspondent Banking (bank to bank transfers) services globally. This prohibits local banks and communities in the islands from accessing cross-border payment services for trade and investments. It has increased the cost of remittances to and between Pacific nations and affects access to development aid and global financial systems.
In his keynote, the Forum Chair noted the withdrawal of Correspondent Banking Relationships, “is a well-documented global phenomenon affecting many emerging markets and developing economies, but especially so for Forum Island Countries.”
“The issues associated with the decline of correspondent banking relationships in the Pacific affect the ability of local banks to connect with International Financial Institutions and access cross-border payment services, thereby affecting the financial systems at a sovereign level, squeezing out government owned bank’s ability to play in their own backyards. Affecting the ability of Pacific countries to meaningfully participate in global supply chains…In a nutshell, the opposite of financial inclusion.”
Australia Treasurer Jim Chalmers in his remarks, had emphasised his Government’s commitment to its Pacific neighbours bearing the brunt of enforcement globally against money laundering, financing for terrorism, and broader criminal transactions through the region.
“Ensuring all Pacific countries have access to safe, secure, and stable banking is one of Australia’s highest priorities in the region. You can bank on Australia to work with you to keep the Pacific connected to the global financial system,” he said.
Earlier in the meeting, PIF Secretary General, Baron Waqa spoke of a joint Pacific Islands Forum and World Bank ‘Pacific Strengthening Correspondent Banking Relationships’ project, to ensure continuous access to correspondent banking services for the region. Emanating from the outcomes of the Forum Economic Ministers Meeting in 2023, the project is in the negotiation phase.
