U.S. Boosts Financial Connectivity in the Pacific

The U.S. is committed to enhancing financial connectivity, investment, and integration in the Pacific region, as highlighted in a Pacific Banking meeting in Brisbane. The aim is to support Pacific Island countries, curb China's growing influence, and address the de-risking trend affecting regional banking resilience.

The United States is intensifying its efforts to strengthen financial connectivity, investment, and integration within the Pacific region. This commitment was underscored during a Pacific Banking meeting in Brisbane, which brought together financial institutions and government officials.

As the Pacific region holds strategic significance for Washington, the U.S. is keen on supporting Pacific Island countries to counter China's growing influence. Brian Nelson, Treasury Undersecretary responsible for the office of Terrorism and Financial Intelligence, emphasized the importance of this engagement at the two-day Pacific Banking Forum, co-hosted by the U.S. and Australia.

Pacific Island countries are experiencing challenges due to major banks ending long-term relationships, thereby limiting access to U.S. dollar-denominated accounts. Nelson acknowledged the issue of bank de-risking and stated that the U.S. is committed to addressing it. Over the last decade, correspondent banking relationships in the Pacific have declined at twice the global average. Efforts by the World Bank and the Asia Development Bank aim to improve this situation.

U.S. Treasury Secretary Janet Yellen, in a virtual address, reiterated the U.S. focus on bolstering the Pacific region's economic resilience by enhancing access to correspondent banks. Yellen highlighted the mutual benefits of a strong and connected Pacific region for both the U.S. and the global economy.

(With inputs from agencies.)