The withdrawal of correspondent banking relationships (CBRs) remains a concern for the international community because, in affected jurisdictions, the decline could have potential adverse consequences on international trade, growth, financial inclusion, and the stability and integrity of the financial system. Building on existing initiatives and IMF technical assistance, this paper discusses a framework that can be readily used by central banks and supervisory authorities to effectively monitor the developments of CBRs in their jurisdiction. The working paper explains the monitoring framework and includes the necessary reporting templates and an analytical tool for the collection of data and analysis of CBRs.

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This note provides a set of high-level recommendations that can guide national regulatory and supervisory responses to the COVID-19 pandemic and offers an overview of measures taken across jurisdictions to date. The banking sector plays a critical role in mitigating the unprecedented macroeconomic and financial shock caused by the pandemic. Timely, targeted and well-designed regulatory and supervisory actions are essential to maintain the provision of critical financial services, particularly to households and firms that are affected most, while mitigating financial risks, maintaining balance sheet transparency, and preserving longer-term financial policy credibility. In this context, authorities should employ the embedded flexibility of regulatory, supervisory, and accounting frameworks, and encourage judicious loan restructuring while continuing to uphold minimum prudential standards. Standard-setting bodies have issued guidance to support national authorities in their efforts to provide effective, sound, and well-coordinated policy measures. Thus far, national policy measures around the world have targeted utilization of available bank capital and liquidity buffers, supporting affected borrowers, promoting balance sheet transparency, and maintaining operational and business continuity of banks as well as payment systems. However, some developing countries have fewer options at their disposal due to limited policy buffers, weaker implementation capacity, and less-sophisticated regulatory frameworks. This could explain their higher reliance on policy responses that are not consistent with the recommendations discussed in this note, which may generate new risks. Disclaimer:The views expressed in this Joint Staff Position Note are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF Management, nor do they necessarily reflect the views of the World Bank, its Board of Executive Directors, or the governments they represent.