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

Author

Listed:
  • Ms. Michaela Erbenova
  • Ms. Yan Liu
  • Mr. Nadim Kyriakos-Saad
  • Aledjandro Lopez Mejia
  • Jose Giancarlo Gasha
  • Mr. Emmanuel Mathias
  • Mr. Mohamed Norat
  • Francisca Fernando
  • Ms. Yasmin Almeida

Abstract

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.

Suggested Citation

  • Ms. Michaela Erbenova & Ms. Yan Liu & Mr. Nadim Kyriakos-Saad & Aledjandro Lopez Mejia & Jose Giancarlo Gasha & Mr. Emmanuel Mathias & Mr. Mohamed Norat & Francisca Fernando & Ms. Yasmin Almeida, 2016. "The Withdrawal of Correspondent Banking Relationships: A Case for Policy Action," IMF Staff Discussion Notes 2016/006, International Monetary Fund.
    • Handle: RePEc:imf:imfsdn:2016/006
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    Citations

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    Cited by:

    1. World Bank Group, 2017. "Migration and Remittances," World Bank Publications - Reports 28444, The World Bank Group.
    2. Linda S. Goldberg & April Meehl, 2020. "Complexity in Large U.S. Banks," Economic Policy Review, Federal Reserve Bank of New York, vol. 26(2), pages 1-29, March.
    3. Ms. Kimberly Beaton & Ms. Svetlana Cerovic & Misael Galdamez & Metodij Hadzi-Vaskov & Franz Loyola & Zsoka Koczan & Mr. Bogdan Lissovolik & Mr. Jan Kees Martijn & Ms. Yulia Ustyugova & Joyce Wong, 2017. "Migration and Remittances in Latin America and the Caribbean: Engines of Growth and Macroeconomic Stabilizers?," IMF Working Papers 2017/144, International Monetary Fund.
    4. Ahn, Daniel P. & Ludema, Rodney D., 2020. "The sword and the shield: The economics of targeted sanctions," European Economic Review, Elsevier, vol. 130(C).
    5. Hannes Warnecke-Berger, 2022. "The financialization of remittances and the individualization of development: A new power geometry of global development," Environment and Planning A, , vol. 54(4), pages 702-721, June.
    6. Simon Grima & Peter J. Baldacchino & Jeremy Mercieca Abela & Jonathan V. Spiteri, 2020. "The Implications of Derisking: The Case of Malta, a Small EU State," JRFM, MDPI, vol. 13(9), pages 1-31, September.

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