The Financial Stability Board (FSB) today published updated data on correspondent banking relationships using data provided by SWIFT. The data is published as part of the FSB’s action plan to assess and address the decline in correspondent banking relationships.
A decline in the number of correspondent banking relationships is a concern because in impacted jurisdictions it may affect the ability to send and receive international payments or drive payments underground with potential adverse impacts for trade, growth, financial inclusion, financial stability and the integrity of the financial system.
The report finds that that the reduction in the total number of active correspondents, as measured by the number of banks that have sent or received messages, continued in the first half of 2017. While there may be some seasonality in the changes in the latest six months, the number of active correspondents in June 2017 is also lower than in June 2016.
There are regional variations in the figures. The twelve-month rates of change between June 2016 and June 2017 appear to confirm increases in the average number of active corridors per country (i.e. of direct relationships with other countries, measured by the flow of SWIFT messages) for North America and Eastern Europe and slower declines than in the year June 2015 to June 2016 in Africa and Oceania. On the other hand, the rate of decline between June 2016 and June 2017 increased in the Americas (excl. North America), Asia and Europe (excluding Eastern Europe) compared with the change from June 2015 to June 2016.
In line with previous analysis by the Committee on Payments and Market Infrastructures and the FSB Correspondent Banking Data Report of July 2017, data continues to show that, at the global level, the decline in the number of active correspondents has not resulted in a lower number of payment messages (volume) or a lower underlying value of the messages processed through SWIFT. The higher volume of messages could in part reflect a lengthening of payment chains, as discussed in the July 2017 report.
A fuller analysis, including methodological enhancements, will be published by mid-2018, based on end-2017 data.
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