The Withdrawal of Correspondent Banking Relationships: A Case for Policy Action
Staff Discussion Notes, June 30, 2016
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Bibliographic details
- Authors: Michaela Erbenova, Yan Liu, Nadim Kyriakos-Saad, Aledjandro Lopez Mejia, Jose Giancarlo Gasha, Emmanuel Mathias, Mohamed Norat, Yasmin Almeida
- Published: June 30, 2016
- Series: Staff Discussion Notes
- DOI: https://doi.org/10.5089/9781498375092.006
Key findings and context
- Focus: withdrawal of correspondent banking relationships (CBRs) in some jurisdictions post-global financial crisis.
- Evidence and consequences:
- Withdrawal of CBRs has reached a critical level in some affected countries and can have a systemic impact if unaddressed.
- Macroeconomic consequences have not been identified so far at a global level.
- Drivers examined:
- The paper explores drivers of CBR withdrawal drawing on recent surveys and select country information.
- Areas potentially undermined if negative impacts continue:
- Financial stability, inclusion, growth and development goals.
Responses and IMF role
- International community responses are presented to address the phenomenon of CBR withdrawal.
- IMF activities described:
- Supporting member countries in the context of surveillance and technical assistance.
- Facilitating dialogue among stakeholders.
- Encouraging data gathering efforts.
Policy implications and recommendations
- The paper concludes by suggesting policy responses needed by public and private sector stakeholders to mitigate potential negative impacts of CBR withdrawal.
- Implicit policy priorities:
- Strengthen coordination among international and domestic authorities.
- Enhance data collection and monitoring of CBR trends.
- Provide targeted technical assistance and capacity building for affected jurisdictions.
- Promote stakeholder dialogue to address drivers such as compliance costs and risk assessment practices.
Subject coverage and keywords
- Subjects: Anti-money laundering and combating the financing of terrorism (AML/CFT), Balance of payments, Banking, Compliance costs, Correspondent banking, Crime, Financial services, Money laundering, Remittances.
- Keywords include: AML/CFT; Correspondent Banking; De-risking; due diligence; remittances; respondent bank; Technical Assistance; Trade Finance; withdrawal of CBR.
The Withdrawal of Correspondent Banking Relationships: A Case for Policy Action, Staff Discussion Note (June 30, 2016).