Under the auspice of the Financial Stability Board's four point action plan, several international organisations have taken measures to address the decline in correspondent banking relationships.
Under the auspice of the Financial Stability Board's four point
action plan, several international organisations have taken measures to
address the decline in correspondent banking relationships, including
further examining the dimensions of the decline and implications for
financial inclusion and financial stability; clarifying regulatory
expectations; supporting domestic capacity-building in jurisdictions
that are home to affected respondent banks; and strengthening tools for
due diligence by correspondent banks.
Effective supervision is also crucial to successfully addressing some
of the concerns which may lead to loss of relationships. This paper
aims to contribute to the international dialogue by focusing on
supervisory practices relating to correspondent banking activities. In
view of the observed decline in correspondent banking relationships,
practices to address excessive de-risking were a particular area of
consideration. As a general matter, while the study found that legal and
regulatory frameworks are consistent with international standards,
their implementation is more variable and would benefit from greater
alignment with the standards and convergence across jurisdictions.
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