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Opinion

Money-laundering scandals spark new risk retrenchment

As Europe’s financial conduct authorities get tougher, banks will be even less likely to support trade between the EU and states that are small and poor.

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Ever since the 2008 financial crisis, US financial misconduct fines have led the world.

However, defenders of Europe’s more collegiate approach to tackling banks’ money-laundering shortcomings say US banks also lead the world for de-risking, shunning some of the globe’s poorest countries from access to the dollar system.

Now a spate of money-laundering scandals is hardening the determination of European regulators to prove they are just as tough as their American equivalents.

And it will have the same effect of turning banks further away from fragile nations, and even charities in their home markets, if the profit is not big enough.

“I’m not risking my licence for a correspondent banking relationship that brings €100,000 in fees,” as one western European bank chief executive tells me.


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Source: Financial Stability Board



HSBC holds an indication of what is coming. It withdrew from about 20 countries and 100 business lines under Stuart Gulliver’s leadership in the early and mid-2010s, partly because of money-laundering risks, after a $1.3 billion deferred prosecution agreement in the US.

“The easiest way to avoid financial crime is not to engage in risky business,” comments Colin Bell, HSBC’s chief compliance officer.








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