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DE-RISKING:
IMPLICATIONS AND
HOW TO ADDRESS THEM
The TFP is partnering with the Centre for European Economic Research (ZEW) in Germany to look
into the drivers and consequences of reduced access to correspondent banking
Supporting trade is one of
the ways the EBRD helps
to foster integration and strengthen the economies in which it invests. The EBRD Trade Facilitation Programme (TFP) plays an important role in achieving this goal by promoting and facilitating international trade to, from and within the countries where the EBRD operates.
And it’s successful. In 2016 – the TFP’s best year to date – business volume rose to €1.543 billion
from €867 million in 2015. The programme now includes more than 100 issuing banks, with
limits exceeding €1 billion in total, and over 800 confirming banks throughout the world.
However, evidence is mounting
that the pool of international banks willing to act as confirming banks has decreased considerably during recent years. The reduction appears to be part of a global de-risking trend in correspondent banking where a combination of tightened regulation, ballooning compliance costs in financial crime regulation and low profitability causes international banks to restrict or even terminate the provision of correspondent banking services to certain regions.
DECREASED PROVISION
The Financial Stability Board has estimated, for example, that the number of banks willing to provide correspondent banking services
in Montenegro has decreased by 36 per cent and even by 56 per