IMF Staff Country Reports

Cabo Verde: Selected Issues Paper

Publication Date:

April 18, 2018

Electronic Access:

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Summary:

This Selected Issues paper provides an overview of the nature and scope of corresponding banking relationships (CBRs) withdrawals in Cabo Verde and discusses policy options to address this challenge. The paper reports the results of a bank level survey and employs the minimum scope framework developed by Grolleman and Jutrsa (2017) on Cabo Verdean bank level data for 2014–2017. Banks in Cabo Verde have experienced a reduction in CBRs since 2013. Bank level survey shows that the terminations are broad based and involves both the central bank and commercial banks. The impact on the banking system has so far been minimal but banks reported facing increased cost of US dollar transactions. The results using the minimum scope framework shows that value of payment flows declined significantly between 2014 and 2016. There is a need for coordinated efforts by all relevant stakeholders at the institutional, national, and regional levels to contribute their knowledge and skills to the resolution of the problem.

Series:

Country Report No. 2018/105

Subject:

Anti-money laundering and combating the financing of terrorism (AML/CFT) Balance of payments Banking Commercial banks Correspondent banking Crime Financial institutions Financial services Offshore financial centers Remittances