The University of Southampton
University of Southampton Institutional Repository

Agents, bills, and correspondents through the ages: an analytical reconsideration of the nature, scope, and significance of correspondent banking and its application in historical precedence and selected case studies

Agents, bills, and correspondents through the ages: an analytical reconsideration of the nature, scope, and significance of correspondent banking and its application in historical precedence and selected case studies
Agents, bills, and correspondents through the ages: an analytical reconsideration of the nature, scope, and significance of correspondent banking and its application in historical precedence and selected case studies
For the past 700 years, processing payment transactions has largely relied on correspondent banking arrangements. Yet, this critical banking business has been unduly neglected by researchers. Much of the meagre literature on it has failed to provide a consistent definition of correspondent banking that clearly identifies protagonists, possible structures and differences to other forms of representation. Often the invention of correspondent banking is linked to the banking practice of Renaissance Italy. However, correspondent relations are much older. Thus a more comprehensive history of correspondent banking is needed. In addition, there has been a dearth of analytical work on the precise – and multi-faceted – market micro-structure of correspondent banking mechanisms to achieve international fund transfers.

In this thesis, first, the scale of the correspondent banking model, its advantages and risks are laid out within the context of the current regulatory environment. Then the analytical framework, including new classifications and criteria, is developed to examine the nature, scope and significance of correspondent relationships. Based on this, an early history of correspondent banking is offered, which includes ancient and Arabic precedents that are often overlooked. Adopting a historical methodology and making use of important case studies, we contribute to filling the gap in the literature on market microstructure, offering a hitherto missing analysis of the various transaction and interaction modes in correspondent arrangements. This covers the role of agents, bills and other financial instruments used in correspondent transactions. One case study from the late 17th century, based on original archival work, involves the newly founded Bank of England. Established to raise money to fund a war and pay the troops abroad, we show it used international fund remittance methods that had been in operation well before the Bank of England was established – and on several occasions did not act as the principal source of the funds; instead, in key cases foreign correspondents were used. We conclude that a new classification of remittance payments is required that allows for transaction cycles, mainly involving bills of exchange and letters of credit.
University of Southampton
Buhl-Freiherr Von Und Zu Guttenberg, Karl
63639718-612f-45eb-8a7c-31c969375d4c
Buhl-Freiherr Von Und Zu Guttenberg, Karl
63639718-612f-45eb-8a7c-31c969375d4c
Werner, Richard
dc217378-eb19-4592-9be4-ab5f847b74a1

Buhl-Freiherr Von Und Zu Guttenberg, Karl (2018) Agents, bills, and correspondents through the ages: an analytical reconsideration of the nature, scope, and significance of correspondent banking and its application in historical precedence and selected case studies. University of Southampton, Doctoral Thesis, 488pp.

Record type: Thesis (Doctoral)

Abstract

For the past 700 years, processing payment transactions has largely relied on correspondent banking arrangements. Yet, this critical banking business has been unduly neglected by researchers. Much of the meagre literature on it has failed to provide a consistent definition of correspondent banking that clearly identifies protagonists, possible structures and differences to other forms of representation. Often the invention of correspondent banking is linked to the banking practice of Renaissance Italy. However, correspondent relations are much older. Thus a more comprehensive history of correspondent banking is needed. In addition, there has been a dearth of analytical work on the precise – and multi-faceted – market micro-structure of correspondent banking mechanisms to achieve international fund transfers.

In this thesis, first, the scale of the correspondent banking model, its advantages and risks are laid out within the context of the current regulatory environment. Then the analytical framework, including new classifications and criteria, is developed to examine the nature, scope and significance of correspondent relationships. Based on this, an early history of correspondent banking is offered, which includes ancient and Arabic precedents that are often overlooked. Adopting a historical methodology and making use of important case studies, we contribute to filling the gap in the literature on market microstructure, offering a hitherto missing analysis of the various transaction and interaction modes in correspondent arrangements. This covers the role of agents, bills and other financial instruments used in correspondent transactions. One case study from the late 17th century, based on original archival work, involves the newly founded Bank of England. Established to raise money to fund a war and pay the troops abroad, we show it used international fund remittance methods that had been in operation well before the Bank of England was established – and on several occasions did not act as the principal source of the funds; instead, in key cases foreign correspondents were used. We conclude that a new classification of remittance payments is required that allows for transaction cycles, mainly involving bills of exchange and letters of credit.

Text
PhD Buhl Guttenberg - Version of Record
Available under License University of Southampton Thesis Licence.
Download (15MB)

More information

Published date: November 2018

Identifiers

Local EPrints ID: 435557
URI: http://eprints.soton.ac.uk/id/eprint/435557
PURE UUID: c2ecc3f3-34fb-4d01-8a76-96d6fa16745e

Catalogue record

Date deposited: 11 Nov 2019 17:30
Last modified: 11 Nov 2019 17:30

Export record

Contributors

Author: Karl Buhl-Freiherr Von Und Zu Guttenberg
Thesis advisor: Richard Werner

University divisions

Download statistics

Downloads from ePrints over the past year. Other digital versions may also be available to download e.g. from the publisher's website.

View more statistics

Atom RSS 1.0 RSS 2.0

Contact ePrints Soton: eprints@soton.ac.uk

ePrints Soton supports OAI 2.0 with a base URL of http://eprints.soton.ac.uk/cgi/oai2

This repository has been built using EPrints software, developed at the University of Southampton, but available to everyone to use.

We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we will assume that you are happy to receive cookies on the University of Southampton website.

×