3.3 Financial and Banking Repercussions

In the period being analyzed the Cuban banking and financial sector continues being permanently submitted to a policy of hostility and isolation by the US government that was manifested by placing impediments on obtaining external funding, on the introduction of obstacles for any financial operation and the creating of delays and cancellations for commercial-financial negotiations, even in their final phases. 

Every year, the embargo reduces the possibility of using correspondent banks, making transactions more complicated, besides those already well-known limitations on the use of the dollar as payment; this has forced the banking and financial system to explore new ways or alternatives to be able to continue doing financial operations with banks abroad. 

Repercussions of a general nature for Cuban banks and financial institutions in this period were: 

• Additional payments in order to effectuate payments in currencies different from those contracted (US dollars); this implies assuming risks because of the type of exchange rate, making operations doubly expensive in these cases.  

• The impossibility of opening accounts in Swiss Francs in some of the top-ranking Swiss Banks.  

• The necessity of keeping minimal balances in Cuban accounts abroad before the risk of an embargo.  

• The impossibility of making payments to beneficiaries of letters of credit in their terms of domicile, having to do so through banks in another region, thus making it more expensive.

• Making sales or funding operations using less than advantageous terms, before the impossibility of a variety of offers willing to negotiate with Cuba.  

• Placing 100 % collateral to confirm non-financed letters of credit, with subsequent freezing of funds from the moment of their issue.   

• The impossibility of processing remittances coming from collaborators, Latin American students and Cuban communities from Central and South America, due to the strong influence of the United States of that region`s banks.

• Pressure on procedures of external loans that have repercussions on increasing the financial costs of operations and force Cuban banks into structuring funding with foreign institutions, to establish mechanisms that will suitably oppose the restrictions deriving from the embargo and the credit evaluation of the country, authorized by qualifying agencies that answer to the interests of American capital.
   
• Cuban banks cannot access specialized financial information sites such as Reuters, considered to be one of the most complete sources.  Even though other alternatives are used, this has negative effects on the market information and analysis services used by banks in the Cuban system and usually used by many clients.