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On the global retreat of correspondent banks

Author

Listed:
  • Tara Rice
  • Goetz von Peter
  • Codruta Boar
Abstract
Correspondent banks have been paring back their cross-border banking relationships for the past decade. The retreat is broad-based, but affects some countries more than others. Jurisdictions with weaker governance and deficient controls to prevent illicit financing have lost more relationships, while trade and growth were supportive. Technological developments, as well as private and public sector initiatives, could help to reduce frictions in cross-border payments. Further monitoring and action are warranted to ensure that all countries enjoy access to safe, low-cost cross-border payment channels.

Suggested Citation

  • Tara Rice & Goetz von Peter & Codruta Boar, 2020. "On the global retreat of correspondent banks," BIS Quarterly Review, Bank for International Settlements, March.
    • Handle: RePEc:bis:bisqtr:2003g
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    References listed on IDEAS

    as
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    4. Brei, Michael & von Peter, Goetz, 2018. "The distance effect in banking and trade," Journal of International Money and Finance, Elsevier, vol. 81(C), pages 116-137.
    5. Zucman, Gabriel & Fagan, Teresa Lavender & Piketty, Thomas, 2015. "The Hidden Wealth of Nations," University of Chicago Press Economics Books, University of Chicago Press, number 9780226245423, Febrero.
    6. Morten Linnemann Bech & Umar Faruqui & Takeshi Shirakami, 2020. "Payments without borders," BIS Quarterly Review, Bank for International Settlements, March.
    7. Morten Linnemann Bech & Jenny Hancock, 2020. "Innovations in payments," BIS Quarterly Review, Bank for International Settlements, March.
    8. Derryl D'Silva & Zuzana Filkova & Frank Packer & Siddharth Tiwari, 2019. "The design of digital financial infrastructure: lessons from India," BIS Papers, Bank for International Settlements, number 106.
    9. Lane, Philip & Milesi-Ferretti, Gian Maria, "undated". "External Wealth of Nations," Instructional Stata datasets for econometrics extwealth, Boston College Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Borchert, Lea & de Haas, Ralph & Kirschenmann, Karolin & Schultz, Alison, 2023. "Broken relationships: De-risking by correspondent banks and international trade," ZEW Discussion Papers 23-064, ZEW - Leibniz Centre for European Economic Research.
    2. Raphael Auer & Codruta Boar & Giulio Cornelli & Jon Frost & Henry Holden & Andreas Wehrli, 2021. "CBDCs beyond borders: results from a survey of central banks," BIS Papers, Bank for International Settlements, number 116.
    3. Kaltenbrunner, Annina & Perez Ruiz, Daniel & Okot, Anjelo, 2022. "A structural analysis of foreign exchange markets in sub-Saharan Africa," EIB Working Papers 2022/11, European Investment Bank (EIB).
    4. Beverley Mullings, 2022. "Racial capitalism, coloniality and the financialization of Caribbean remittances," Environment and Planning A, , vol. 54(4), pages 744-760, June.
    5. Marco Cipriani & Linda S. Goldberg & Gabriele La Spada, 2023. "Financial Sanctions, SWIFT, and the Architecture of the International Payment System," Journal of Economic Perspectives, American Economic Association, vol. 37(1), pages 31-52, Winter.
    6. Morten Linnemann Bech & Umar Faruqui & Takeshi Shirakami, 2020. "Payments without borders," BIS Quarterly Review, Bank for International Settlements, March.
    7. Morten Linnemann Bech & Jenny Hancock, 2020. "Innovations in payments," BIS Quarterly Review, Bank for International Settlements, March.
    8. Raphael Auer & Philipp Haene & Henry Holden, 2021. "Multi-CBDC arrangements and the future of cross-border payments," BIS Papers, Bank for International Settlements, number 115.
    9. Joerg Mayer, 2024. "De-dollarization: the global payment infrastructure and wholesale central bank digital currencies," FMM Working Paper 102-2024, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    10. Markus Merz, 2021. "Contemporaneous financial intermediation," Digital Finance, Springer, vol. 3(1), pages 25-44, March.
    11. Shalva Mkhatrishvili & Wim Boonstra, 2022. "What we know on Central Bank Digital Currencies (so far)," NBG Working Papers 01/2022, National Bank of Georgia.
    12. David Leung & Bénédicte Nolens & Douglas Arner & Jon Frost, 2022. "Corporate digital identity: no silver bullet, but a silver lining," BIS Papers, Bank for International Settlements, number 126.
    13. Bindseil, Ulrich & Pantelopoulos, George, 2022. "Towards the holy grail of cross-border payments," Working Paper Series 2693, European Central Bank.
    14. Agustín Carstens, 2020. "Shaping the future of payments," BIS Quarterly Review, Bank for International Settlements, March.

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    More about this item

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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