Correspondent accounts are bank accounts that banks maintain with each other to settle funds transfers and for other banking services. The ability of banks to maintain these accounts with other banks around the world is critical to the efficient functioning of the global financial system. A troubling trend has surfaced over the past few years that indicates that some large international banks have been restricting, terminating or charging more for the correspondent banking services that they offer to banks in certain countries because the bank and/or its home country are seen as a greater compliance risk.
Kathleen A. Scott wrote a recent column in the New York Law Journal that discusses a new report issued by the international Financial Stability Board to the G20 countries that discusses its progress on an action plan to address this decline in correspondent banking.
Read the article: “Work Continues on Addressing Correspondent Banking Decline.”