The check-clearing services of correspondent banks are often used because:
A) the respondent bank is required to purchase a minimum amount of services.
B) it reduces required reserves.
C) the correspondent bank may be marketing their own services in a local community.
D) it often reduces float.
E) it decreases interest income.

Question

Quizplus · Accepted Answer

Correspondent banks can help reduce float by providing faster check clearing services. This benefits both the respondent bank and its customers, who will have quicker access to funds.

The Check-Clearing Services of Correspondent Banks Are Often Used Because