Arab banks’ ties to foreign banks under pressure, survey finds

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September 5, 2016

More than a third of Arab banks have seen their business links with foreign banks shrink over the past four years because of pressures such as economic sanctions and concern about money laundering, according to a study published on Monday.

“The inability of banks in some Arab countries to enter into correspondent relationships with foreign banks could have a deleterious impact on trade and remittances and ultimately on real economic activity,” the Arab Monetary Fund said in the study.  Among Arab banks whose relationships were cut, 63 percent were able to find replacement relationships and 17 percent managed to make other arrangements to meet their needs, but 20 percent were unable to do either, the survey showed.