MDL correspondent banking: who clears the MDL

Tracing a MDL chain

Each instruction names the institution holding that bank's MDL account. Following those links repeatedly ends at a bank that publishes no onward MDL instruction — the ultimate clearer, with direct access to clearing. That is where the money actually settles before moving inwards to the beneficiary.

Who clears MDL payments?

MDL settles through the local clearing system. Banks without direct access hold a nostro account with a correspondent that has it, so a MDL payment reaches the beneficiary by settling at that correspondent first and moving inwards. In the current dataset 8 distinct institutions act as MDL correspondents.

How concentrated is MDL clearing?

The three largest MDL correspondents between them serve about 67% of the banks that publish a MDL instruction. Concentration matters because the withdrawal of one correspondent can affect a large number of respondent banks at once.

How do I find a bank's MDL correspondent?

Search the bank's BIC, select MDL, and the chain resolves hop by hop to the institution that clears the currency, including the nostro account number on each relationship.