Closing correspondent banks: Banks worried about regulations close their overseas correspondent banks
13 June, 2016Richard Northedge
For more than a century, correspondent banking has allowed manufacturers to import materials and to export products; it has permitted people to buy overseas properties and ex-pat workers to remit wages to families. Correspondent banking became a global
network of bilateral bank-to-bank relationships that enabled international cheque clearing, wire transfers, trade finance and cash-management.
Correspondent banking was once the oil that lubricated world trade but it is now drying up rapidly. Richard Northedge explains why and looks at whether the correspondence banking still has a future.
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This article first appeared in Financial World
, the journal for The London Institute of Banking & Finance.