Following Royal Bank of Canada´s announcement that it will be closing its Uruguay office, other international banks will also be leaving, according to finance sector sources quoted in El País newspaper.
Credit Suisse, for example, announced that it will be closing client accounts holding less than USD 1 million in 50 countries, one of which is Uruguay. A customer of the bank in Uruguay told El País that local staff directed him to an account manager in Switzerland for more information.
Local financial experts say that the main reasons for these closures are at the international level, and that Uruguay can do little to prevent them. Mariano Sardans, the CEO of a wealth management company, is quoted saying that “nobody wants to be the next HSBC”. To provide context, the article explains that in 2011 accounts holding Mexican drug money “slipped” or “found their way” (in Spanish “se colaron”) into the US branch of HSBC leading to USD 2 billion in fines from US regulators.
According to Sardans, it is very difficult for international banks to ensure “Know your Customer” policies are in place to avoid drug money entering their accounts. A partner in another firm, Bruno Gili, agrees: International banks may be “assuming they could have a reputational problem because of a market such as Uruguay…it is very likely they will withdraw from places where the volume of business is low. This is not a problem with Uruguay but a result of global risk management…there is little the government can do”.