Staff Discussion Notes

The Withdrawal of Correspondent Banking Relationships: A Case for Policy Action

By Michaela Erbenova, Yan Liu, Nadim Kyriakos-Saad, Aledjandro Lopez Mejia, Jose Giancarlo Gasha, Emmanuel Mathias, Mohamed Norat, Francisca Fernando, Yasmin Almeida

June 30, 2016

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Michaela Erbenova, Yan Liu, Nadim Kyriakos-Saad, Aledjandro Lopez Mejia, Jose Giancarlo Gasha, Emmanuel Mathias, Mohamed Norat, Francisca Fernando, and Yasmin Almeida. The Withdrawal of Correspondent Banking Relationships: A Case for Policy Action, (USA: International Monetary Fund, 2016) accessed November 21, 2024

Disclaimer: This Staff Discussion Note represents the views of the authors and does not necessarily represent IMF views or IMF policy. The views expressed herein should be attributed to the authors and not to the IMF, its Executive Board, or its management. Staff Discussion Notes are published to elicit comments and to further debate.

Summary

This paper focuses on the withdrawal of correspondent banking relationships (CBRs) in some jurisdictions post-global financial crisis. It describes existing evidence and consequences of the withdrawal of CBRs and explores drivers of this phenomenon drawing on recent surveys and select country information. While the withdrawal of CBRs has reached a critical level in some affected countries, which can have a systemic impact if unaddressed, macroeconomic consequences have not been identified so far at a global level. The paper presents responses from the international community to address this phenomenon, and explains the role that the IMF has been playing in this global effort, especially with regards to supporting member countries in the context of surveillance and technical assistance, facilitating dialogue among stakeholders, and encouraging data gathering efforts. The paper concludes by suggesting policy responses by public and private sector stakeholders needed to further mitigate potential negative impacts that could undermine financial stability, inclusion, growth and development goals.

Subject: 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: AML/CFT, Anti-money laundering and combating the financing of terrorism (AML/CFT), Australia and New Zealand, Bank customer, Banking supervision and regulation, BNP Paribas, Caribbean, Correspondent and respondent banks, Correspondent Banking, Correspondent relationship, De-risking, Due diligence, Global, Money laundering, Money or Value Transfer Services, Money Transfer Operators, Payment systems, Remittances, Respondent bank, Risk assessment, SDN, Technical Assistance, Trade Finance, Withdrawal of CBR

Publication Details

  • Pages:

    41

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Staff Discussion Notes No. 2016/006

  • Stock No:

    SDNEA2016006

  • ISBN:

    9781498375092

  • ISSN:

    2617-6750

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