The Correspondent Banking Squeeze the Region Never Fully Escaped

Global banks have spent a decade trimming their Caribbean relationships. The withdrawals slowed but never stopped, and the cost lands on the smallest economies first.

Correspondent banking relationships are the plumbing that lets a bank in Roseau settle a dollar payment through New York. When a global bank decides a small market is not worth the compliance cost, that plumbing narrows. The International Monetary Fund and the World Bank have both documented the Caribbean as one of the regions hit hardest.

The consequences are practical. Remittances get more expensive, trade finance grows scarcer, and correspondent access becomes a competitive advantage that favors the largest local banks over the smallest.

Regional bodies have pushed shared compliance utilities and a collective negotiating posture. The logic is sound. The uptake has been slow, and the underlying incentive for a global bank to exit a small market has not changed.