Correspondent banking lets a local bank serve clients internationally through a partner bank’s books. The correspondent holds a nostro account relationship, clears wires, and often supports trade documents when the local bank lacks a direct presence abroad.
Key takeaways
- Losing correspondent access can cut a bank’s ability to move hard currency payments.
- Global banks tighten relationships when compliance risk looks high (de-risking).
- Fees and covering bank chains add cost and delay to cross-border transfers.
- SWIFT messages instruct movements; actual final money sits in correspondent accounts.