On 16 March 2018, the Financial Stability Board (FSB) delivered two reports to G20 Finance Ministers and Central Bank Governors that assess the decline in correspondent banking relationships:

  • progress report on the FSB action plan to assess and address the decline in correspondent banking. The progress report describes promising developments that address identified issues. This includes the Wolfsberg Group updating its correspondent banking due diligence questionnaire. It also reports on the latest additional steps including: (i) the publication in March 2018 of an update of global data on correspondent banking relationships, using data provided by SWIFT as of end-June 2017; (ii) further steps to promote the coordination of domestic capacity building to improve and build trust in the supervisory and compliance frameworks of affected jurisdictions; and (iii) work on technical solutions aimed at improving the efficiency of due diligence procedures and reducing compliance costs; and
  • stocktake on remittance service providers’ access to banking services, including recommendations to improve accessibility. The stocktake identifies a variety of intertwined drivers for the termination of banking services to remittance service providers, including profitability, the perceived high risk of the remittance sector from an anti-money laundering / countering the financing of terrorism (AML/CFT) perspective, general poor supervision of remittance service providers and, in some jurisdictions, weak compliance with international standards, particularly those relating to AML/CFT. The stocktake makes recommendations in four areas to: (i) promote better dialogue between stakeholders and better practices in the remittance sector; (ii) improve the implementation of international standards and oversight of the remittance sector; (iii) encourage the use of innovation to facilitate remittance firms’ greater access to banking services; and (iv) encourage technical assistance related to remittances.