Correspondent banking relationship

An arrangement whereby one bank, the settlement bank, service-providing bank or correspondent, makes or receives payments – potentially performing other banking services in addition – on behalf of another bank, the customer bank, user bank or respondent. – Payments by correspondent banks are often made through reciprocal accounts, so-called nostro and loro accounts. These may be linked to credit lines. – A nostro account (nostro = our) is an account held by the domestic bank, located in the euro area, in foreign currency – practically in USD, CHF or JPY – with a foreign bank. A loro account (loro = their, her) is an account that the domestic bank maintains for the foreign correspondent bank in domestic currency – practically in EUR. – See alliances, cross-border, share certificate, guard money, loro account, transaction bank.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/