Regulatory Alerts2022-05-05
Prudential Guidelines on Controlling Risk in Correspondent Accounts
The Eastern Caribbean Central Bank issued prudential guidelines requiring financial institutions to restrict correspondent banking access to third-party entities not licensed or supervised under the Banking Act. These measures address heightened counterparty, reputational, and money laundering risks arising from nested accounts and offshore gaming entities that could jeopardize US correspondent relationships. Institutions must implement strict know-your-customer standards and robust due diligence procedures to minimize collateral risk and preserve the integrity of the Eastern Caribbean Currency Union's financial system.
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