# Correspondent banking relationship

- Canonical URL: https://www.gerhardmerk.de/correspondent-banking-relationship
- Post ID: 590911
- Modified: 2023-07-25T21:00:42+00:00
- Language: en

## Definition

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. Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! 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/

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