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When Money Can No Longer Travel
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When Money Can No Longer Travel

Andreas Adriano
IMF, 2017
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Editorial Rating

8

Qualities

  • Eye Opening
  • Concrete Examples
  • Engaging

Recommendation

The ability of companies in some developing countries to conduct international business is at risk due to – paradoxically – “derisking.” Under derisking, global banks stop wiring money, exchanging currency or processing credit card payments for nations perceived as money-laundering or terrorist-financing risks. But, as Andreas Adriano of the International Monetary Fund explains, without these various forms of correspondent banking, businesses and citizens in emerging markets are choked off from the global financial system. getAbstract recommends this intriguing article to bankers and those traveling to or conducting business in a developing nation.

Take-Aways

  • “Derisking,” in which global correspondent banks cease processing vital transactions such as money transfers, is taking a toll on nations that rely on global payments.
  • The rise of derisking parallels the increase in regulations designed to thwart illegal financial activities.
  • When compliance costs for major banks surge, correspondent banking becomes less profitable. The prices of money transfers rise as banks exit riskier markets.

About the Author

Andreas Adriano is a senior communications officer at the IMF.

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