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Recent Trends in Correspondent Banking Relationships: Further Considerations
Author:
International Monetary Fund
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Series:
Policy Papers
Volume/Issue:
Volume 2017: Issue 018
Language:
English
Publication Date:
21 Apr 2017
DOI:
https://doi.org/10.5089/9781498346900.007
ISBN:
9781498346900
ISSN:
2663-3493
Pages:
58
Keywords:
PP; respondent bank; CBR withdrawal; due diligence; risk tolerance; payment flow; risk appetite; central bank; Correspondent banking; Anti-money laundering and combating the financing of terrorism (AML/CFT); Remittances; Foreign banks; Compliance costs; Global; Caribbean
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Correspondent banking relationships (CBRs), which facilitate global trade and economic activity, have been under pressure in several countries. So far, cross-border payments have remained stable and economic activity has been largely unaffected, despite a recent slight decrease in the number of CBRs. However, in a limited number of countries, financial fragilities have been accentuated as their cross-border flows are concentrated through fewer CBRs or maintained through alternative arrangements. These fragilities could undermine affected countries’ long-run growth and financial inclusion prospects by increasing costs of financial services and negatively affecting bank ratings.
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Cover Policy Papers
Policy Papers
ISSN:
2663-3493
Publisher:
International Monetary Fund