> Posted by Center Staff
This post is part of a series examining the global phenomenon of de-risking and its impact on financial inclusion. To investigate this issue, CFI staff partnered with Credit Suisse Global Citizen Rissa Ofilada, a compliance lawyer based in the Philippines, to undertake a literature review and conduct interviews with key players in the conversation on de-risking.
The root causes of de-risking have been surprisingly hard to pin down. In our previous post in this series, we looked at the role that the Financial Action Task Force (FATF) and global standards have played. Today we’ll examine the role of the U.S. government.
It is no wonder that decisions by the U.S. government—at both federal and state-levels—have a significant ripple effect. Most international settlement systems—the way that banks move money across borders—are pegged to the U.S. dollar. Furthermore, the U.S. plays a strong role in setting international global norms. Added to this is the massive size of the U.S. financial system and the power that the U.S. government has to govern the system. Finally, banks located in emerging markets, even if they are largely domestically oriented, need to be able to do business with U.S. businesses and banks, and therefore must remain in good standing with American authorities.