The bank corridor that quietly closed
A note on watching for what banks don't say.
A correspondent bank stopped processing.
Last month a major US correspondent bank stopped processing wires from a specific Eastern European bank without announcement. Clients of ours who held with the smaller bank and tried to wire to a US counterparty discovered this when their wire bounced after three days.
The signal had been there.
The correspondent had updated its country-risk page two weeks earlier. The smaller bank had quietly increased its capital ratio. The trade press had run a small piece on increased compliance burden in the corridor. Read separately, none of this was decisive. Read together, the corridor was closing.
We caught the read on a Wednesday.
Clients affected got a note before the wire bounced for the next batch. None had to lose three days of float. Some moved their primary banking ahead of the closure being formal.