Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

A correspondent account is established to facilitate transactions between financial institutions, specifically to receive deposits and manage funds on behalf of one institution at another. This type of account is essential for banks that do not have a direct presence in a particular market or country, enabling them to offer services like wire transfers, foreign currencies, and other banking services. Through correspondent accounts, banks can proceed with international operations and transactions while managing their liquidity effectively.

The other options represent different types of accounts or contexts within banking and financial services but do not specifically define an account for receiving deposits on behalf of a financial institution in the way that a correspondent account does. A discount account usually relates to loans or notes discounted by a bank, an exempt account pertains to specific accounts that may fall outside certain regulations, and a foreign account generally refers to accounts held by residents in foreign financial institutions, but none specifically encapsulate the role of receiving deposits on behalf of another institution.