FSB Correspondent Banking Data Report – Update
A decline in the number of correspondent banking relationships remains a source of concern for the international community because, in affected jurisdictions, it may impact the ability to send and receive international payments, or drive some payment flows underground, with potential adverse consequences on growth, financial inclusion and international trade. While impacts to the stability and integrity of the global financial system have not been identified, concerns remain at the national and regional level.
The report – based upon year-end 2017 data from SWIFT – shows that the decline in the number of active correspondents, as measured by the flow of messages, continued in 2017, with a year-on-year reduction of 4.1%. All continents or sub-continents saw a decline in the number of active correspondents in 2017, with the rate of decline ranging between 5.2% and 6.7%, except in Northern America where it was 2.9%. From January 2011 to end-2017, the number of active correspondents declined by 15.5% and active corridors by 7.3%. The number of active corridors (defined as country pairs that processed at least one transaction) also declined in 2017, by 2.4%, and from January 2011 the data shows a decline of 7.3%.
Small economies with a Gross Domestic Product (GDP) of less than USD 10 billion have seen a stronger decline in the ratio of foreign counterparties to local banks (-23.4%), compared economies with a GDP of between USD 10 billion and USD 1 trillion (approximately -18%) and economies with a GDP of above USD 1 trillion (-8.4%). The decline in small economies has not affected, on average, the volume and value of messages they received; these have increased more for small economies compared to the larger economies.