A global bank closes a respondent account in a four-minute committee item and books it as portfolio management. The cost surfaces years later on the desk of a supervisor in Douala or Abidjan who was never consulted and has no instrument to answer with.
Once a quarter, in a transaction banking division in London, Paris or New York, a committee works through a list of respondent relationships and decides which ones to keep. The revenue attached to each is small. The file is thick. The jurisdiction appears in three internal risk registers that do not speak to one another. Nobody in that room will ever be sanctioned for closing an account, and several of them could be sanctioned for keeping one. The decision takes minutes.
Its consequences run for a decade at the other end of the corridor, and they are not commercial consequences. When a correspondent exits, risk moves from a balance sheet where it is measured, priced and capitalised to a financial system where it is none of those things. That transfer is the subject here. Fifteen years of policy response have been held back by one analytical habit, the habit of reading de-risking as a private negotiation between two institutions, and the supervisors of the CEMAC and WAEMU zones are among those left holding what the negotiation produces.
The arithmetic that closes a nostro account
A correspondent underwrites the regulatory exposure of every institution it serves, and it does so at home, where its licence sits and the penalties are set. Against a tail risk of that shape, the fee income from a respondent in Libreville or Lomé is a rounding error. Relationship management does not correct the asymmetry: the two sides of the trade are not denominated in the same units.
The survey evidence is mundane. In the work behind the Financial Stability Board's 2017 data report, summarised by Rice, von Peter and Boar in the March 2020 BIS Quarterly Review, about 40 per cent of banks gave a reconsideration of business strategy as their reason for terminating relationships, roughly a third said the relationship had stopped being profitable once the required due diligence was priced in, and some 22 per cent cited compliance and reputational concerns. The Financial Action Task Force reached a compatible conclusion in its stocktake of 27 October 2021, identifying profitability as the primary driver and defining de-risking as the avoidance rather than the management of risk, a practice it described as inconsistent with the risk-based approach that sits at the centre of its own standards.
Mechanics determine what is actually lost. Dollar and euro settlement run through a nostro account on the correspondent's books and through the SWIFT relationship management authorisation without which two institutions cannot exchange a payment message at all. Trade access runs through something narrower still: the correspondent's willingness to add its confirmation to a documentary credit issued in Douala or Abidjan. Recommendation 13 of the FATF standards and the Basel Committee's revised correspondent banking annex of June 2017 both say plainly that these relationships are to be risk-rated one by one rather than by postcode. Both are routinely read the other way.
Concentration is the exposure that nobody reports
The headline counts are well established. Between January 2011 and the end of 2017 the number of active correspondents worldwide fell by 15.5 per cent and the number of active corridors by 7.3 per cent, with declines of 23 per cent for the dollar and 20.8 per cent for the euro, according to the Financial Stability Board's data report update of 16 November 2018. Africa lost 18.6 per cent of its active correspondents over that period across all currencies, and 25.1 per cent of those handling dollars. The BIS put the global decline at roughly 20 per cent between 2011 and 2018, active corridors falling from about 10,800 to 9,800, and found in March 2020 that jurisdictions repeatedly designated high risk by the FATF lost correspondents some 20 percentage points faster than the average.
Read carelessly, those numbers look survivable: the value and volume of payments kept rising throughout. That is precisely the problem. Payments were not lost, they were funnelled. A respondent bank does not end up with fewer relationships of equal weight. It ends up with one relationship carrying most of the settlement value and two others carrying almost none. No capital ratio captures that. Borchert, de Haas, Kirschenmann and Schultz found in their 2024 study that firms suffered most where their bank had few correspondents to begin with, which is the empirical form of the same proposition: the count is a poor proxy, the concentration is the exposure.
Regional substitution has begun and deserves credit without being oversold. The African Development Bank reported in May 2026 that six of the top seven confirming banks for African trade finance are now African institutions, against two in the top ten of preceding surveys. That is a real structural gain. It also relocates the vulnerability rather than removing it: the Nairobi or Casablanca confirming bank still needs its own dollar clearer, and the chain has merely acquired a link.
What the corridor costs in the franc zone
The price shows up first in trade. A survey of financial institutions in Côte d'Ivoire, Ghana, Nigeria and Senegal, published by the IFC and the WTO in October 2022, found that trade finance supported only 25 per cent of goods trade in those four economies, against an African average of 40 per cent and a global range of 60 to 80 per cent. Ninety per cent of the banks surveyed named difficulty meeting foreign correspondents' requirements as a barrier. The average price of a letter of credit ran between 2 and 4 per cent of transaction value, above the emerging-market average of around 2 per cent and an order of magnitude above the 0.25 to 0.50 per cent typical of advanced economies. That spread is not a risk premium on the underlying goods. It is the cost of a thin correspondent network, paid by importers of fertiliser, fuel and pharmaceuticals.
At continental scale, the African Development Bank's May 2026 report put unmet demand for trade finance at between 74 and 92 billion dollars in 2024 and recorded commercial banks intermediating just 23 per cent of trade over 2020 to 2024 against 40 per cent before the pandemic, with rejection rates of 37 per cent. Tighter correspondent risk appetite features among the factors the Bank expects could widen that gap to between 86.6 and 102.6 billion dollars by 2027.
Remittances degrade along a different path and arrive at the same place. Sub-Saharan Africa remained the most expensive region in the world to send money to in the third quarter of 2025, at 8.46 per cent of a 200 dollar transfer against a global average of 6.36 per cent, and banks remained the most expensive channel at 14.99 per cent, on the World Bank's Remittance Prices Worldwide figures published in September 2025. Volume does not vanish at those prices. It relocates, to cash couriers and to settlement rails outside anyone's perimeter, which is the exact inversion of what the measures were adopted to achieve.
The transmission has now been measured directly. Borchert and her co-authors, using terminated correspondent relationships in emerging Europe, found that a firm whose main bank lost a correspondent was 5.2 percentage points less likely to keep exporting in the short run and 19.8 percentage points less likely four years out, with export revenues 57 per cent below matched controls. At sector level, export growth ran around 8 percentage points lower in high-withdrawal countries. Those estimates come from banking systems considerably deeper than those of the franc zone, which argues for treating them as a floor.
The listing channel is reversible, and that is the supervisor's opening
The belt between an assessment and a closed account is now explicit in the official record. IMF staff, in the 2025 work on CEMAC common policies, urged COBAC, GABAC and the BEAC to close the strategic deficiencies identified in the region's mutual evaluations precisely in order to avert diminished international trade capacity and the loss of essential correspondent banking relationships. COBAC regulation R-2023/01, promulgated in July 2024 and followed by specific guidelines in February 2025, is the tooling for that.
Evidence that the channel runs in both directions is fresh. Senegal came off the FATF list of jurisdictions under increased monitoring in October 2024, Mali in June 2025, Burkina Faso and Nigeria in October 2025; Cameroon and Côte d'Ivoire were still on it when the FATF published its statement of 19 June 2026. A listing is a policy variable with a known exit rather than a climate. The implication for supervisory practice is direct: the number and concentration of a bank's clearing routes belong in periodic reporting alongside liquidity metrics, and the loss of the largest dollar correspondent belongs in the stress scenarios a bank runs for its own board.
One table a board should be asking for
Ask the treasurer and the head of compliance to produce, jointly and quarterly, a single sheet. One line per dollar and euro clearing route. For each: the share of settlement value it carries, the date the Wolfsberg CBDDQ was last refreshed and sent, the number of requests for information received in the quarter, and the median calendar days to a complete answer. Then ask what happens if line one gives thirty days' notice, and refuse any answer that is a term sheet rather than a route that has cleared a live payment.
That median response time deserves more attention than it gets. It sits almost entirely within the institution's control, and correspondents use it as a proxy for everything they cannot verify directly, including the quality of beneficial ownership records and the seriousness of know-your-customer's-customer work. Relationships are lost through slow answers far more often than through bad clients.
Sources
Financial Stability Board, FSB Correspondent Banking Data Report: Update, 16 November 2018. Tara Rice, Goetz von Peter and Codruta Boar, On the global retreat of correspondent banks, BIS Quarterly Review, March 2020. Financial Action Task Force, High-Level Synopsis of the Stocktake of the Unintended Consequences of the FATF Standards, 27 October 2021. Lea Borchert, Ralph de Haas, Karolin Kirschenmann and Alison Schultz, Broken Relationships: De-Risking by Correspondent Banks and International Trade, CEPR Discussion Paper 19373, September 2024. International Finance Corporation and World Trade Organization, Trade Finance in West Africa: A Study of Côte d'Ivoire, Ghana, Nigeria and Senegal, October 2022. African Development Bank, Trade Finance Supply in Africa: Post-Covid Trends and Emerging Opportunities, May 2026. World Bank, Remittance Prices Worldwide, Issue 54, September 2025. International Monetary Fund, Central African Economic and Monetary Community (CEMAC): Staff Report on the Common Policies of Member Countries, 2025.