The Financial Stability Board (FSB) has released its latest progress report on the implementation of its four-point action to assess and address the decline in correspondence banking. The progress report includes a set of deliverables for 2017 to implement the action plan, and describes progress in taking forward the plan:
- Further examining the dimensions of the problem, and its causes and effects;
- Clarifying regulatory expectations, as a matter of priority, including through guidance by the Financial Action Task Force (FATF);
- Domestic capacity-building in jurisdictions that are home to affected respondent banks;
- Strengthening tools for due diligence by correspondent banks.
Alexander Karrer, Chair of the CBCG and Deputy State Secretary at the Swiss Federal Department of Finance said: "A well-functioning correspondent banking system is essential for ensuring international payments. A decline in correspondent banking relationships can adversely affect growth, financial inclusion, remittances flows as well as the stability and integrity of the global financial system. Since the creation of the CBCG earlier this year, good progress has been made to assess and address this issue, but additional steps are needed to move from awareness raising to action. Given the number of actors involved, international cooperation and coordination are key."
A further progress report on the work of the CBCG will be published in advance of the G20 Leaders’ Summit in Hamburg in July 2017.
