Vostro Account

A Vostro Account is an account serviced by a bank on behalf of an account owner bank. It is an account a correspondent bank, usually U.S. or U.K., holds on behalf of a foreign bank. Also called Loro Account. It is the counterpart to a "Nostro" acccount.

Nostro (Italian) = "Ours" Vostro (Italian) = "Yours" Loro (Italian) = "Theirs"

These terms come from Italian. The word "Bank" also comes from Italian, as it is derived from the Italian word for "bench", or "banco". This is where money-changing operations initially took place in Europe.

Many banking terms are derived from the Italian language. Banking began in the Lombardy region of Italy. The "Longobardi" (Long-beards) from the North, near Switzerland developed banking - hence many banking terms come from the Italian language.

Some believe that these early bankers with the long beards were Italian/Swiss Jews (Ashkenazim). Jews often were denied the right to own property and often went into business, especially developing financial services as a means of generating private wealth without property ownership.

To this day, "[1]Lombard Street" in London is a financial center. Barclays Bank among others had their headquarters there. The word "Lombard" in Polish and some other European languages means a moneylender/pawnshop.

EXAMPLE: Suppose there are two correspondent banks doing business with clients in one anothers' countries. Deutsche Bank and Bank of America. (Used for purposes of illustration only - these two particular banks may not be correspondents)

Deutsche Bank will hold a Vostro account which belongs to Bank of America in Euros. Bank of America will hold a Vostro account which belongs to Deutsche bank in Dollars.

Deutsche bank will have a Nostro account in America, with Bank of America denominated in US Dollars. Bank of America will have a Nostro account in Germany, with Deutsche Bank denominated in Euros.