IMF Working Paper – Loss of Correspondent Banking Relationships i n the Caribbean: Trends, Impact, and Policy Options.

A correspondent banking relationship (CBR) is a bilateral arrangement between banks, often involving a reciprocal cross-border relationship in multiple currencies. According to Erbenova et al. (2016), a correspondent banking arrangement involves one bank (the correspondent – for example a major international bank) providing a deposit account or other liability accounts, and related services, to another bank (the respondent – for example a bank located and doing business in the Caribbean. The arrangement requires the exchange of messages to settle transactions by crediting and debiting those accounts.