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Banks worldwide: why caution becomes a blockade

· Helfen statt Blockieren editorial team

No law forbids a bank to carry out a permitted transfer. Even so, banks have for years been withdrawing from whole regions and groups of customers. Central bank data show how far this retreat reaches, who feels it and why for banks it is often the simplest calculation.

−47%active correspondent banks in Latin America and the Caribbean, 2011 to 2022 (exactly −47.1 percent)BIS CPMI, May 2023
75%of large international banks reported fewer correspondent relationships in 2015World Bank, survey, November 2015
−93%number of payment messages with Afghanistan, 2011 to 2022 (exactly −92.6 percent)BIS CPMI, May 2023, table 11
685 billionUS dollars in remittances reached low- and middle-income countries in 2024World Bank, 18 Dec 2024

How a cross-border payment travels

A transfer from Berlin to Havana, Lagos or Port Moresby rarely goes direct. It runs through one or more correspondent banks that hold accounts for each other. Above all for payments in US dollars, almost every bank in the world needs a partner with access to the American financial system. At the end of 2022 just over half of the value of all payment messages was in US dollars. What the path of a permitted payment looks like station by station, and where it stalls, is explained in “Why a permitted payment gets stuck”.

What the data show

The payments committee of the Bank for International Settlements (BIS) has measured the retreat since 2011 using SWIFT messages. The result is clear in direction and uneven in distribution. In no region did the number of active correspondent banks rise. In Latin America and the Caribbean it fell by almost half, in Oceania more than half of US dollar partners were lost, in Northern America the decline was smallest.

Retreat of correspondent banks by region, 2011 to 2022

Decline in the number of active correspondent banks in percent, measured by SWIFT payment messages (MT 103 and MT 202). First series all currencies, second series US dollar only. No region recorded an increase.

Regionall currenciesUS dollar only
Latin America and Caribbean47.149.9
Oceania37.855.1
Africa34.240.9
Europe excl. Eastern Europe34.241.4
Eastern Europe34.045.6
Asia29.939.1
Northern America19.419.1

Source: Committee on Payments and Market Infrastructures (CPMI) of the BIS, chartpack “Correspondent banking data”, May 2023, tables 2 and 3, data to end 2022 (latest available). File daten/cpmi_korrespondenz_2011_2022.csv.

Not every decline is harm. Banks merge, technology replaces intermediate stations, and the value of payments still rose in many countries. But an analysis in the BIS Quarterly Review of 2020 found patterns: countries with higher perceived corruption lost more partners, repeated FATF designation as a high-risk country accelerated the loss by around 20 percentage points, offshore centres lost markedly more. Rising remittance costs appeared only in countries that had lost partners. The authors call this an association, not proof, and their analysis preliminary.

Why banks leave

In 2015 the World Bank surveyed supervisors and banks. 75 percent of large international banks reported fewer correspondent relationships. More than 69 percent of authorities saw money transfer operators as the most affected, followed by small and medium-sized banks and small exporters. 28 percent of the transfer operators surveyed no longer had access to banking services. Banks named as reasons profitability, pressure from partner banks or authorities, lack of confidence in transfer operators’ controls and their own reputation.

In a stocktake in 2021 the FATF reached the same conclusion: profitability concerns are the main driver, and high compliance costs feed into that calculation. Poorly implemented anti-money-laundering rules and the lack of case-by-case assessment contribute, as do fear of supervisors and concern for reputation. Loss of an account counts as de-risking when it is not based on a case-by-case assessment. Added to this is an uneven calculation described by the economist Előd Takáts: a missed hit can cost a bank a heavy fine, a refused permitted payment costs it almost nothing. What this calculation does to the people who screen is set out in the article “Working under blockade”.

Who pays the price

Families. According to the World Bank estimate, remittances reached 685 billion US dollars in low- and middle-income countries in 2024, more than foreign direct investment and development aid combined. Through a bank, a transfer of 200 US dollars cost on average 13.40 percent at the end of 2024, through a transfer operator 4.98 percent. The figures by region and provider are in the topic sheet “Money and transfers”.

Firms. A working paper by economists around Ralph de Haas examined banks in Eastern Europe that lost their correspondent bank. The corporate clients of these banks then exported less, made up for it only partly at home, and revenue and employment fell. The paper has not yet been peer-reviewed.

Aid organisations. After UN Resolution 2664 of December 2022, the Norwegian Refugee Council reported a 40 percent fall in banks’ enquiries about its payments. Later, according to a study by the International Peace Institute, it reported a 300 percent rise in de-risking. Progress with banks is therefore reversible. What the resolution has changed and what not is set out in the article “Humanitarian exemptions”.

Cuba: one bank says no, two governments say why

Western Union stopped transfers to Cuba on 5 February 2025 after the US renewed its list of restricted Cuban companies; it includes Orbit, the firm that handled the payouts. Secretary of State Rubio justified the list as depriving the parts of the regime controlled by the military and intelligence services of funds. Some 200 foreign banks have reportedly ended their relations with Cuba since 2021, according to information given to the UN Special Rapporteur. The Rapporteur wrote that de-risking and over-compliance in the wake of the US embargo had considerably aggravated the humanitarian situation.

The other half is that the Cuban leadership built the payment route this way itself: according to the report, Orbit works for Financiera Cimex, which is controlled by the military conglomerate GAESA. And the same leadership persecutes political opponents: Prisoners Defenders counted 1,351 political prisoners in September 2026. For families in Miami, Madrid or Berlin the result is the same: money finds its way with more difficulty and at higher cost.

What governments and standard-setters are doing

Governments know the problem. In its de-risking strategy of 25 April 2023 the US Treasury likewise named profitability as the main driver, alongside reputation, risk appetite, unclear supervisory expectations and regulatory burden. Most affected, it said, are small and medium-sized money services businesses, diaspora communities that rely on remittances, certain small businesses and humanitarian organisations. In October 2023 the FATF amended its Recommendation 8 on non-profit organisations: measures are to be focused and proportionate and should not unduly disrupt or discourage legitimate charitable activity. Whether this changes banks’ minds cannot yet be measured; the BIS data end in 2022.

Two perspectives

What banks and supervisors say

Banks are obliged to prevent money laundering, terrorist financing and sanctions breaches. According to the European Banking Authority, closing an account whose risk one cannot manage is partly legitimate risk management.

Where countries run weak supervision of their own, the retreat is also a result of shortcomings there; the FATF explicitly names weak national regulation as a reason.

What those affected and experts say

Rejecting whole countries or customer groups means not assessing the individual case; that is exactly what the FATF and the European Banking Authority require.

When payments are pushed out of the regulated system, into cash or informal networks, the control the rules were meant to achieve declines; this too is in the FATF stocktake.

What would help

The proposals of expert bodies have been the same for years: assess risk case by case instead of excluding whole groups, supervision and guidance that give banks certainty, and exemptions that banks can apply without lengthy legal review. Customers in the EU also have rights, such as the basic payment account and the Blocking Statute against certain US laws; they are set out in the lead article “What companies, banks and every individual can do”.

This piece is information, not legal, investment or health advice. It makes no diagnoses. It reflects the view of the editorial team, relies on the sources listed and names opposing positions. “Helfen statt Blockieren” is non-partisan.

Sources

All online sources accessed on 3 November 2026. Data files for checking: daten/ of this series.

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