| Yes. If I want to wire you some cash from bank A to bank B, my bank (A) will debit my account,and credit their account (called a nostro). There, we have two possibilities : * The two banks are connected (meaning B has an account in A), A will debit their nostro and credit the account of B in A (called a loro) and inform bank B via swift. B will debit the account of A in B, credit their nostro, debit their nostro and credit your account * The two banks are not directly connected : A will debit my account and credit their nostro. They will then debit their nostro and credit the account of a third institution (another bank or a clearing house). They will send a message to the bank B and the third institution, telling them that the cash should be credited to you. If the bank B and the third institution are connected, see above. If not, the process goes on, until the cash "reaches" bank B. This is highly simplified, but it's the principle. |
https://en.wikipedia.org/wiki/Nostro_and_vostro_accounts
the loro is used when a third bank is in the process or however is not as common as the two above.