Rocky relations

Just a few years ago Lebanese banks were apprehensively awaiting regulations they expected would impact business. These arrived with the United States’ introduction of the Foreign Account Tax Compliance Act (FATCA), alongside international standards for anti-money laundering and counter-terrorism financing (AML/CTF), as well as the implementation of Basel 3 regulations – a framework for basically every aspect of banking, from corporate governance to working capital based on risk profiles, with rules more stringent than previous Basel frameworks. However, irrespective of their compliance in implementing those measures, Arab banks have complained that there have been a high number of closures or interruptions of correspondent banking relations (CBR) with banks in the rest of the world, primarily those in the United States and European Union. Interruptions of CBRs cause more difficulty in banking relations and transactions, and can make business unprofitable for the banks. The main question is not why, but how