Correspondent account

A correspondent bank is a financial institution abroad, to which a domestic credit institution maintains a business relationship and are handled by the foreign transactions and foreign payments of customers, above all in foreign exchange. In general, there are no corporate ownership among banks.

Business

In case of settlement of transactions in foreign trade, for example,

• Payments in foreign currency,
• Hinauslegung of letters of credit
• Documentary collection
• Fulfillment of the payments from securities transactions abroad
• Encashment of foreign securities
• Trade with varieties

Correspondent banks are switched on. Within the € uro - room usually consist account mutual connections between the major banks or processed via the central banks. For payments in a third currency, ie in a currency which is neither in the numerator country is still in the recipient country, the home currency, another correspondent bank for the actual payment process is turned on.

Most consist mutual bank accounts in the currency of the home country for processing of payment transactions and credit lines. On the mutual business assignment, the credit institutions often lead a Reziprozitätsstatistik.

Historical Development

Contact with a correspondent bank ran a long time on the post. The authenticity of documents could be verified based on the exchanged signature lists. With the advent of telex connections key tables were exchanged, which allowed an authenticity check on the basis of key features for certain document fields (eg, amount, currency, date of order, branch of the Bank ). Since the 1970s, the necessary messages via the SWIFT electronic communication system are exchanged between correspondent banks.