Recent Trends in Correspondent Banking Relationships – Further Considerations

Correspondent banking relationships (CBRs), which facilitate global trade and economic activity, have been under pressure in several countries. So far, crossborder payments have remained stable and economic activity has been largely unaffected, despite a recent slight decrease in the number of CBRs. However, in a limited number of countries, financial fragilities have been accentuated as their crossborder flows are concentrated through fewer CBRs or maintained through alternative arrangements. These fragilities could undermine affected countries’ long-run growth and financial inclusion prospects by increasing costs of financial services and negatively affecting bank ratings.