Recent Trends in Correspondent Banking Relationships: Further Considerations
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Bibliographic details
- Published: April 21, 2017
Overview
- Publication date: April 21, 2017
- Topic: Correspondent banking relationships (CBRs) and recent pressures on those relationships.
Summary
- 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.
- 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.
Key findings and observations
- Cross-border payments: remained stable.
- Number of CBRs: recent slight decrease.
- Concentration risk: cross-border flows in some countries are concentrated through fewer CBRs.
- Alternative arrangements: some countries maintain cross-border flows through alternative arrangements.
- Potential consequences:
- Increased costs of financial services.
- Negative effects on bank ratings.
- Risks to long-run growth and financial inclusion prospects.
Implications for affected countries
- Concentration of cross-border flows through fewer CBRs or reliance on alternative arrangements can accentuate financial fragilities.
- Financial fragilities may translate into higher costs for users of financial services and poorer bank creditworthiness as reflected in bank ratings.
- These effects pose risks to long-run economic growth and financial inclusion.
Recent Trends in Correspondent Banking Relationships: Further Considerations, April 21, 2017 (USA: International Monetary Fund,) accessed 9/17/2026
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- Recent Trends in Correspondent Banking Relationships: Further Considerations, April 21, 2017