The Financial Stability Board (FSB) has today published a Report to the G20 on actions taken to assess and address the decline in correspondent banking. This report provides an update on work by the FSB in partnership with other organisations to examine the extent and causes of banks’ withdrawal from correspondent banking and the implications for affected jurisdictions, including risks of financial exclusion, particularly where it affects flows such as remittances which are a key source of funds for people in many developing countries.
The ability to make and receive international payments via correspondent banking is vital for businesses and individuals, and for the G20’s goal of strong, sustainable, balanced growth.
A World Bank survey of jurisdictions and banks commissioned by the FSB, to be published later this year, finds that roughly half of the emerging market and developing economies surveyed have experienced a decline in correspondent banking services. Three quarters of the 20 large correspondent banks participating in the survey responded that the number of correspondent accounts they hold for other banks had declined between end-2012 and mid-2015. The regions most affected are the Caribbean, East Asia Pacific and Eastern Europe and Central Asia, especially small jurisdictions with significant offshore banking activities and high risk jurisdictions.
The main drivers given by the large banks for their reduction in correspondent banking were concerns about money laundering and terrorism financing risks in the jurisdictions of their counterpart banks. Authorities and local banks predominantly mentioned overall risk appetite and lower profitability as causes, which may in part be affected by money laundering risk concerns and higher costs from extra due diligence.
The FSB will continue to work in partnership with the Basel Committee for Banking Supervision (BCBS), Committee on Payments and Market Infrastructures (CPMI), Financial Action Task Force (FATF), International Monetary Fund (IMF), Legal Entity Identifier Regulatory Oversight Committee (LEI ROC) and World Bank to address this issue through a four-point action plan:
Your email address will not be published. Required fields are marked *
Goa Institute of Management hosts its Grand Alumni Meet
World Peace Prize Conferred Upon Elder D. Tod Christofferson
The Westin Pune Koregaon Park Presents Malaysian Food Festival
Savour palatable Rajasthani cuisine@ 3 Spices, DoubleTree by Hilton
Select a category
Play slots online with critic.net
2014 The Global Indian New Network (TGINN)