correspondent bank

Definitions

Economics

  • noun a bank that acts as an agent for other banks, especially foreign banks who have no local office

Forex

  • A bank that provides services on behalf of another financial company or institution that cannot be physically present for a transaction. The bank acts as an agent or representative of this separate entity.  The use of a correspondent bank is typically necessary when servicing a transaction originating in a foreign country. Correspondent banks are the typical agents used in Forex trading since these transactions, by definition, always involve foreign parties.
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