Last year, in September, I discussed the increasing trend for some banks to terminate their banking account relationships with banks in certain areas of the world. Kathleen A. Scott, “Work Continues on Addressing Correspondent Banking Decline,” New York Law Journal, Sept. 16, 2016. In this month’s column, I highlight some of the recent efforts by international organizations to attempt to address this trend, which unfortunately continues today.
A Little Background
As explained in my September 2016 column, funds transfer around the globe by use of accounts banks maintain with each other—most of them maintained by banks (respondents) at large international banks (correspondents), primarily in the United States, Canada, Europe and the United Kingdom. If the correspondent banks see a higher risk in maintaining those accounts and decide to close them, respondent banks have increasing difficulty accessing the international financial system, which can to consequences such as curtailing international business transactions and impeding the ability for residents of these countries to receive remittances from relatives working abroad.
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