Payments system at risk
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The international payment system oils the wheels of trade with the dollar still predominantly the currency used for transferring funds from buyers to sellers of goods and services. Any grit that gets caught in the delicate trade cogs creates significant riskPayments system at risk
The international payment system oils the wheels of trade with the dollar still predominantly the currency used for transferring funds from buyers to sellers of goods and services. Any grit that gets caught in the delicate trade cogs creates significant risk for international trade. Through correspondent banking relationships, banks can access financial services in different jurisdictions and provide cross-border services to their customers, supporting international trade and financial inclusion. The likelihood of Bank of Valletta losing its last correspondent bank prepared to clear its US dollars payments is indeed worrying. The sensitivity of some jurisdictions to the risks of money laundering is high. US banks and international ones operating in the US face huge penalties if they are found to process payments that could be connected with money-laundering activities, including tax evasion. For the past decade, commercial banks have taken note of this development in international correspondent banking. Most banks now refuse to service companies that could be used for money laundering including payment gateways, gambling companies and businesses dealing in cryptocurrencies. When... Read more