Two banks hit by FSA money laundering probe
TWO banks are being investigated for lax money-laundering controls and others are likely to be handling the proceeds of corruption and other financial crime, Britain’s financial watchdog said yesterday.
The FSA said the two institutions, both believed to be private banks, had shown “serious weaknesses” in how they managed “high-risk” customers, including those whose public status made them vulnerable to corruption.
In a damning report, the FSA said some banks appeared unwilling to turn away or exit very profitable business relationships, even when there appeared to be an unacceptable risk of handling the proceeds of crime.
It said it is now considering whether it is appropriate to take further regulatory action against other banks.
The FSA said: “Around a third of banks, including the private banking arms of some major banking groups, appeared willing to accept very high levels of money-laundering risk if the immediate reputational and regulatory risk was acceptable.”
More than half of banks visited by the FSA failed to have the requisite due diligence measures in “higher-risk” situations, and failed to identify or record negative information about customers.