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AMF/IMF High-Level Workshop on De-risking—Correspondent Bank Relationships and Beyond
In Collaboration with the FSB and the World Bank
October 27, 2015
Venue: Emirates Palace, Abu Dhabi
Objective—Provide forum for Arab Countries regulators to develop a dialogue on de-risking and discuss possible solutions
In response to enhanced implementation of global regulatory standards and economic and trade sanctions, several global banks have reportedly scaled back or terminated (de-risked) their foreign correspondent relations and reduced their trade financing activities in certain regions. Given the significant role these banks play in the global trade and payment system, any large scale withdrawal could potentially carry serious and unintended consequences by excluding or limiting access to international finance of transactions, sectors, and customers that are not the targets of the regulatory and enforcement actions. Such de-risking from international finance could in turn have negative implications for affected countries’ financial stability and growth prospects.
This workshop focuses on the potential impact of de-risking in the Arab region and aims at developing possible solutions.
First half of the day — Regulators closed door
Participation:
· Regulators from AMF member countries
· Regulators from countries with main correspondent banking relationships in the Arab region: U.S. Treasury, U.S. Fed, U.S. OCC, Bank of England; and international agencies: IMF, WB, FSB, FATF, MENA FATF, BCBS AML Expert Group.
Second half of the day — Regulators and banks
Participation: Regulators and Senior Bankers from selected regional and international banks.
First half - regulators closed door
8:00-8:30 / Registration8:30-8:45 / Opening Remarks
H.E. Mubarak Rashid Al Mansouri, Governor, Central Bank of UAE
Dr. Abdulrahman A. Al Hamidy, Director General Chairman of the Board, AMF
Mr. Masood Ahmed, Director of the Middle East and Central Asia Department, IMF
Timing: 3-5 minutes welcome by each speaker
8:45-9:00 / Keynote Speech to lay out the issues
H.E. Dr. Fahad Almubarak, Governor, Saudi Arabian Monetary Agency
9:00-9:15 / De-risking in the Arab Region–Presentation of Surveys
Ms. Kristina Kostial, IMF: IMF-UAB survey results on de-risking
Mr. Emile J. M. Van der Does, World Bank: WB survey on de-risking
Timing: 7 minutes for each speaker
09:15-10:45 / Panel Session 1—CB Risk Perception in the Arab Region
This session would discuss the possible reasons why the Arab region is associated with a perception of high risk in CB and ways to improve this perception, including (1) Arab countries regulators’ assessment of how de-risking has affected the region; (2) actions by Arab banks to meet enhanced regulatory standards; and (3)responses and potential responses by Arab countries and home regulators to mitigate any unintended adverse effects.
Panelists (4): H.E. Dr. Mohammad Al-Hashel, Governor, Central Bank of Kuwait; H.E. Riad T. Salamé, Governor, Banque du Liban; Mr. Gamal Najem, Deputy Governor, Central Bank of Egypt; Mr. Thomas Baxter, General Counsel and Executive Vice President, Federal Reserve Bank of New York.
Moderator: Mr. Svein Andresen, Secretary General, Financial Stability Board.
Timing: 5 minutes for moderator, 40 minutes for panelists, 40 minutes for Q&A, and 5 minutes for moderator to summarize consensus.
10:45-11:00 / Coffee Break
11:00-11:10 / Keynote Speech to lay out the issues
Adam Szubin, Undersecretary for Terrorism and Financial Crimes, U.S. Treasury.
11:10-12:40 / Panel Session 2—Correspondent Banking (CB) under the Revised FATF Standard: Applying a Risk-Based Approach to CB
This session will discuss the FATF framework’s move toward a risk-based approach on AML/CFT issues, including (1) key changes to the AML/CFT risk framework and enhanced regulatory scrutiny and compliance expectations; (2) how the home regulators evaluate the current CB practice, including the use of nested arrangements in CB; (3) the role of cross-border regulatory coordination, including the role for greater regulatory clarity; (4) issues specific to CB in Islamic banking. This session will discuss also the impact of de-risking on trade finance.
Panelists (5): H.E. Rasheed Mohammed Al Maraj, Governor, Central Bank of Bahrain; Ms. Grovetta N.Gardineer, Deputy Comptroller, U.S. Office of the Comptroller of the Currency; Mr. Andy Murfin, Senior Adviser, International Banking Supervision, Bank of England; Ms.Valerie Schilling, Senior Policy Analyst, Financial Action Task Force, Mr. Adel Al Qulaish, Executive Secretary, MENA FATF
Moderator: H.E. Dr. Abdulrahman A. Al Hamidy, Director General Chairman of the Board of the AMF.
Timing: 5 minutes for moderator, 40 minutes for panelists, 40 minutes for Q&A, and 5 minutes for moderator to summarize consensus.
12:40-13:25 / Light lunch (including registration for the second half and seating arrangements)
Second half - regulators and bankers:
13:25-13:35 / Opening RemarksDr. Abdulrahman A. Al Hamidy, Director General Chairman of the Board, AMF
Mr. Ross Leckow, Deputy General Counsel, Legal Department, IMF
Timing: 3-5 minutes for each speaker
13:35-14:00 / To lay out the issues
Mr. Abdulaziz Al Ghurair, Chairman of UAE Banks Federation.
Mr. Mohamed Barakat, Chairman of Union of Arab Banks, CEO, Arab International Bank
Timing: 10 minutes for each speaker
14:00-15:40 / Panel Session 3—Obstacles to Foreign Banks for Operating in and Serving the Region
This session would discuss the AML/CFT issues for correspondent banks that operate in the Arab region, including (1) what has driven some of the global banks to cut ties with the region–costs and risks; (2) ways to lower the cost and compliance risk exposure of CB for foreign banks operating in and serving the region and how the stakeholders, including local and home regulators, can help; and (3) the impact of economic and trade sanctions, including with regard to trade finance.
Panelists (6): H.E. Hamood Sangour Al Zadjaly, Executive President of Central Bank of Oman; Ms. Julie Monaco, Managing Director, Citibank; Mr. Madhavan Ramaswamy, Managing Director and Head of Correspondent Banking, Standard Chartered Bank; Mr John Gibbons, TS EMEA Regional Executive; JP Morgan, Mr. Tirad Al Mahmoud, CEO of Abu Dhabi Islamic Bank, Mr. Arshad Ghafur, Country Executive for the MENA, Bank of America Merrill Lynch;
Moderator: Dr.Saud Albrikan, Director, Economic Policy Institute, AMF
Timing: 3 minutes for moderator, 50-60 minutes for panelists, 30-40 minutes for Q&A, and 2 minutes for moderator to summarize consensus
15:40-15:55 / Coffee break
15:55-17:15 / Panel Session 4—Strengthening Regulatory and Supervisory Frameworks and Lowering CB Risk
This session would identify the key areas in need of regulatory and infrastructure upgrades in order to lower the cost of CB in Arab region.
Panelists (3): H.E. Dr. Maher Sheikh Hasan, Deputy Governor, Central Bank of Jordan, H.E. Talal I. Al-Qudaibi, President & CEO, Riyad Bank, (Saudi Arabia); Mr. Nemeh Sabbagh, CEO of Arab Bank (Jordan).
Moderator: Aditya Narain. Deputy Director, Monetary and Capital Markets Department, IMF
Timing: 5 minutes for moderator, 40 minutes for panelists, 30 minutes for Q&A, and 5 minutes for moderator to summarize consensus
17:15-17:30 / Coffee break
17:30-18:00 / Closed Door Session—Regulators on next steps
This session could focus on what the Arab countries regulators can do as a collective and what type of assistance they would need from other regulators.
Chaired by the Governor of UAE Central Bank and the Director General Chairman of the Board of the Arab Monetary Fund.