FSB Correspondent Banking Data Report – Update
This report provides updated data on correspondent banking relationships using data provided by SWIFT. The data is published as part of the FSB’s action plan to assess and address the decline in correspondent banking relationships.
A decline in the number of correspondent banking relationships is a concern because in impacted jurisdictions it may affect the ability to send and receive international payments or drive payments underground with potential adverse impacts for trade, growth, financial inclusion, financial stability and the integrity of the financial system.
The report finds that the reduction in the total number of active correspondents, as measured by the number of banks that have sent or received messages, continued in the first half of 2017. While there may be some seasonality in the changes in the latest six months, the number of active correspondents in June 2017 is also lower than in June 2016.
There are regional variations in the figures. The twelve-month rates of change between June 2016 and June 2017 appear to confirm increases in the average number of active corridors per country (i.e. of direct relationships with other countries, again measured by the flow of SWIFT messages) for North America and Eastern Europe and slower declines than in the year June 2015 to June 2016 in Africa and Oceania. On the other hand, the rate of decline between June 2016 and June 2017 increased in the Americas (excl. North America), Asia and Europe (excluding Eastern Europe) compared with the change from June 2015 to June 2016.
In line with previous analysis by the Committee on Payments and Market Infrastructures and the FSB Correspondent Banking Data Report of July 2017, data continues to show that, at the global level, the decline in the number of active correspondents has not resulted in a lower number of payment messages (volume) or a lower underlying value of the messages processed through SWIFT. The higher volume of messages could in part reflect a lengthening of payment chains, as discussed in the July 2017 report.
The next progress report to the G20 on the FSB action plan to address the decline in correspondent banking relationships will be published later this month, including a description of measures by the public sector and the financial industry to facilitate correspondent banking.
To strengthen tools for due diligence, a statement is being published today by the Basel Committee on Banking Supervision, Committee on Payments and Markets Infrastructures, Financial Action Task Force and the FSB welcoming the Correspondent Banking Due Diligence Questionnaire published by the Wolfsberg Group (an association of thirteen global banks which aims to develop frameworks and guidance for the management of financial crime risks).