Which term describes accounts held by U.S. banks for foreign banks?

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Multiple Choice

Which term describes accounts held by U.S. banks for foreign banks?

Foreign Correspondent Accounts describe the type of banking relationship where a U.S. bank holds accounts for a foreign bank to enable that foreign bank to access the U.S. financial system. This setup lets the foreign bank clear and settle payments, process checks, and offer cash-management services in U.S. dollars on behalf of its customers. It’s a core part of correspondent banking, connecting international banks to the U.S. payment infrastructure. This term best fits the description because it specifically names the account relationship—the U.S. bank’s accounts that the foreign bank uses—whereas Cross-Border ACH is about the payment network, OFAC screening is a sanctions check, and Payable Through Accounts refers to a particular access arrangement, not the general account type itself.

Foreign Correspondent Accounts describe the type of banking relationship where a U.S. bank holds accounts for a foreign bank to enable that foreign bank to access the U.S. financial system. This setup lets the foreign bank clear and settle payments, process checks, and offer cash-management services in U.S. dollars on behalf of its customers. It’s a core part of correspondent banking, connecting international banks to the U.S. payment infrastructure.

This term best fits the description because it specifically names the account relationship—the U.S. bank’s accounts that the foreign bank uses—whereas Cross-Border ACH is about the payment network, OFAC screening is a sanctions check, and Payable Through Accounts refers to a particular access arrangement, not the general account type itself.

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