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The law is very complicated, but it generally gives regulators that actual power. They can make demands to specific banks. They can even make demands to specifi
by cynicalkane 10y ago
The law is very complicated, but it generally gives regulators that actual power. They can make demands to specific banks. They can even make demands to specific banking systems; like, a regulator can go to a bank and say "You need to make your AML system do Y instead of X."
And the bank has to do it or they end up like HSBC. In fact, that was exactly why HSBC was fined billions. Regulators told them to do specific things, like use Form X in Iran instead of Form Y, or classify Mexico with risk measure N+1 instead of N, and they didn't do them. This is all in the various public records.
- patrickg_zill 10y agoAre you sure that is "all" that HSBC did? Your explanation seems very simplified. e.g. from https://www.theguardian.com/business/2012/dec/14/hsbc-money-laundering-fine-management https://www.theguardian.com/business/2012/dec/14/hsbc-money-... "In some branches the boxes of cash being deposited were so big the tellers' windows had to be enlarged."
- cynicalkane 10y agoIt's considered a given that money laundering occurs at every big bank. It's impossible not to happen at an organization of that size. This entire subthread is about how AML is enforced. Specifically, it's enforced by regulators doing whatever they feel they need to do. The punishment wasn't for money laundering, it's for money laundering in a manner that obedience, according to the regulators, would have caught. For international banks, it's especially arbitrary because regulations are so loose overseas. In the UK it's very easy to move small amounts anonymously. This is routinely used for small-time laundering by organized crime and banks are fully aware of it. The long arm of US law goes after UK banks handling Mexican dirty money, but not UK banks handling UK dirty money. A lot of what constitutes "illegal money laundering" is actually political.