Whether the delegating side is abroad changes the name. The Bank of Japan's 2000 paper calls the bank that carries out the work a correspondent bank when the delegating institution is located abroad, and distinguishes this from the relationship between a direct participant in a domestic settlement system and the institution that delegates to it1. CHAPS in the United Kingdom describes institutions that do not participate directly and pay through a direct participant as using agency or correspondent banking2.

Notes

  1. Bank of Japan, "金融機関の決済リスク管理について" (On settlement risk management by financial institutions; our translation of the title), February 2000, page 9 and Figure 1 (in Japanese). ↩

  2. Bank of England, "CHAPS", "Who uses CHAPS?". ↩