Global Correspondent Banking 1870-2000

Project Information

GloCoBank

Grant agreement ID: 883758

DOI

10.3030/883758

Project closed

EC signature date 16 June 2020

Start date 1 March 2021

End date 31 May 2026

Funded under

• EXCELLENT SCIENCE - European Research Council (ERC)

Total cost

€ 2 408 114,00

EU contribution

€ 2 408 114,00

Coordinated by

THE CHANCELLOR, MASTERS AND SCHOLARS OF THE UNIVERSITY OF OXFORD
United Kingdom

Periodic Reporting for period 3 - GloCoBank (Global Correspondent Banking 1870-2000)

Reporting period: 2024-03-01 to 2025-08-31

Summary of the context and overall objectives of the project

The global payments system is the underlying plumbing of the international economy, but it has not attracted much interest from academic research. How do we move money around the world, and how has this changed in response to innovation in technology, wars, crises and new patterns of economic performance across the world?

GloCoBank aims to analyse the changing shape of international banking networks across the 20th century using an innovative methodology that allows greater specificity and inclusion than ever before. The correspondent banking network that will be uncovered was the basis of the global payments system, but we know very little about it. When merchants settled accounts across borders, they made transfers from the merchant’s bank to the customer’s bank. From the late 19th century, the contraction of time and space was accomplished by sending telegraph messages from the buyer’s home bank to an agent in the seller’s country to transfer funds to the seller’s bank. These interbank connections remain the underlying architecture of the global payments system but we do not have a complete sense of how they were built, managed or how they changed over time. Existing literature on global payments relies on official data on capital flows that are exclusively available at a national level, which prevents an analysis by type of bank, sub-national region, or more specific location. Moreover, these national data on bank flows are consistently available for most countries only from 1960, truncating our ability to assess the changing geography of international banking during periods of upheaval such as wars or economic crisis. To date there has been no comprehensive data source to accomplish this. GloCoBank will create and analyse a new set of data and combine it with extensive archival research to allow a much more granular assessment of the patterns and dynamics of international banking and payments. The data will capture the links between thousands of individual banks involved in international payments through bilateral correspondent banking contracts across 130 years to help us understand how the global payments system evolved.

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

The GloCoBank research team has progressed research across all of the planned actions and regions. Our work has focused on two main areas: collecting and preparing the data on the links between banks, and identifying and collecting evidence from relevant archives. The data team has built the correspondent bank dataset for 1920–1985 to c.300,000 global banking links to London and New York, representing c. 1.5 million data points. We have collected annual data for the period 1925-35 and made excellent progress collecting data for the period 1990-2000. Unlike earlier periods that are primarily dyadic, these data show multilateral networks between hundreds of cities around the world. Initial visualisations are very promising and data for 2005 and 2007 will follow. We collected supplementary data on the volume and geographic distribution of global correspondent banking payments messages from 1977-2011, and extra correspondent bank links of African banks in the 1970s.

In addition to collecting the data on bilateral bank links, a key strategy is to examine records from central banks as well as commercial banks. We have gathered a wide range of qualitative evidence from archives of banks, governments and central banks in the UK (London, Edinburgh, Manchester), Europe (Basel, Zurich, Brussels, Paris, Milan, Naples, Frankfurt, Hamburg, Berlin), Latin America (Mexico, Brazil, Argentina, Chile), East Asia (Shanghai, Beijing, Nanjing, Tianjin, Changchun, Shengyang, Tokyo, Hong Kong) and the USA (Palo Alto, Maryland, Washington).

So far we have published 4 articles and 6 working papers. Work was begun on the project monograph on the evolution of the architecture of global payments from 1870-2025. Papers from our 2nd international conference will form the basis for the publication of an edited collection. Over the course of the project our research team has included 10 PostDocs, most of whom continue to collaborate with us. We have also built new research collaborations with researchers in China, Japan and Nigeria.

To share our results, project members have presented papers at GloCoBank Research Network meetings and at 4 annual project workshops (Feb 2022, May 2023, Sep 2023, Sep 2024). The project organised 2 international conferences in Oxford in Mar 2023 and Mar 2025 (plus a PostDoc workshop). Team members also presented their research at conferences/seminars in Germany, France, Italy, UK, Austria, Switzerland, the Netherlands, Belgium, Luxembourg, Sweden, Spain, the USA, China and Japan, including events for policy-makers at the BIS, Austrian Central Bank and Bank of England. The project organised a specialist panel at the World Economic History Congress in Lund in July 2025.

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

The project has digitised a huge amount of data which, for the first time, describes correspondent banking networks for London and New York between 1900–1985 offering new insights into the changing pattern and dynamics of banking during this period, supplemented by archival research. New AI and LLM technologies have offered great opportunities to develop and experiment with ways to extract and manage data and we have extended the core data collection beyond the original dataset as planned in the project proposal in order to capture more banks (in London and overseas) increasing the scope of our project. By the end of the project this will include data for 1990–2000, 2005, 2007. Archives in East Asia proved unexpectedly rich for a range of relevant topics. Other highlights include evidence from banks in Germany for the interwar financial crisis and postwar rebuilding, and from archives and libraries in Tokyo. The archives of the BIS in Switzerland were especially useful because central bankers gathered here to discuss the evolution and policy implications of payments systems from 1969 onward. We have shown for the first time that correspondent banking links can have a significant effect on bank performance in a crisis and this area of research is enhanced by annual data for the interwar period. By the end of the project we will publish a visualisation of the network and how it changed over time on our website. We will also eventually make the data available for researchers from around the world.

Our pioneering archival research has uncovered resources that have not been used by researchers before. This has shown how correspondent banking works at bank level, how banks chose and managed partners, how the architecture of global payments through correspondent banks was built, and the role of central bank supervisors in the development of the global payments system. As we move into the final reporting period we are poised to publish a significant body of research which offers exciting insights into this previously under-researched area. We have thus made good progress toward our goals of moving beyond what international flows were, as recorded in official national accounts, and instead to focus on how these flows were managed between banks.

GloCoBank project logo

The Bank of England, London (1885-1895)