Correspondent banks are used to facilitate funds transfers. They also play a role in letter of credit transactions but, since the law relating to these has now developed into a distinct body of rules, it is not intended to discuss them, except by way of analogy. It is common for banks to maintain a number of correspondent bank relationships, generally one in each country or, at least, each country in which their customers might have trade or financial transactions to carry out. A correspondent bank relationship means that the two banks maintain current accounts with each other, known as “nostro” and “vostro” accounts. Nostro account means “our account with another institution”, so that an English bank’s nostro account reflects the number of Swiss francs which it has on deposit with its Swiss correspondent, while vostro account means “your account with us”, so that the English bank’s vostro account would show the number of pounds sterling which its Swiss correspondent maintains on deposit with the English bank. When a bank’s customer instructs it to make an international payment, it will send a message to its correspondent in the country in which the account into which the payment is to be made is situated, debiting its appropriate nostro account with the required amount, while the corre-