Report to the G20 on actions taken to assess and address the decline in correspondent banking
The Report to the G20 on actions taken to assess and address the decline in correspondent banking provides a report on work by the FSB in partnership with other organisations to examine the extent and causes of banks’ withdrawal from correspondent banking and the implications for affected jurisdictions. A World Bank survey commissioned by the FSB finds that almost half of the emerging market and developing economies surveyed have experienced a decline in correspondent banking services, particularly in the Caribbean, East Asia Pacific and Eastern Europe & Central Asia. The main drivers for the reduction, as reported by banks and authorities, in correspondent banking were concerns about money laundering and terrorism financing risks in affected jurisdictions, overall risk appetite and lack of profitability. The report sets out a four-point action plan, to:
- further examine the dimensions of the decline and implications for financial inclusion and financial stability;
- clarify regulatory expectations, including through more guidance by the Financial Action Task Force;
- support domestic capacity-building in jurisdictions that are home to affected respondent banks; and
- strengthen tools for due diligence by correspondent banks.