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And the reason why is AML. Your experience is bad, but have you seen the public reaction when a bank has been involved in money laundering? It is irrational (a

And the reason why is AML. Your experience is bad, but have you seen the public reaction when a bank has been involved in money laundering? It is irrational (and strange, countries in the EU will happily launder your money, some domestic banks still accept suitcases full of cash in the basement but the rage is all directed to US/UK banks where money laundering is almost impossible without blackmailing someone in AML...this happens, but it is fairly rare...and risky because most banks now have teams of people watching their AML staff, following them outside work, going through their emails, etc.). The solution is simple: remove AML/KYC regulations. Let police investigate and find evidence of crimes. This isn't the job of banks, banks aren't the police, AML departments are basically run as private police departments, and the false positive rate is (unsurprisingly) through the roof. They also don't do a particularly good job with true positives either: some obscure Kazakh politician wants to open an account with $5m...okay, there is no Wikipedia page for him, he has provided proof of income, you suspect it is forged, you call the Kazakh police, they tell you it is legit...it is very hard to get right because you don't have any legal investigatory powers.

emmanuel_1234 4y ago
This is spot on. Although I disagree with the removal of AML/KYC regulation, this is indeed the reason why it's so complicated. HSBC was fined heavily and only came out of judiciaral control recently because they didn't care enough about money laundering. All the banks are scared to shit to be pinned by the regulator now, so that's what you get.
- skippyboxedhero 4y ago
  I used to work in wealth management, I worked in research but once you see how this stuff actually works...why? The issue with HSBC wasn't related to them not caring enough, what happened is that some employees in their Mexican office essentially went rogue. HSBC can't blackmail their staff, money launderers can. HSBC can't bribe their staff with suitcases full of cash, money launderers can. HSBC can't threaten to execute your kids, money launderers can. And, again, even if you assume this all isn't true...banks do not have the investigatory powers. People who want to launder money do not turn up a bank with a briefcase full of cash, and wink repeatedly at the cashier when handing it over...they put substantial resources in disguising the source, and working out where the gaps are (with HSBC, it was currency exchange...this has been a weak spot for decades because it is mostly used by large corporates and there is an assumption that AML happens somewhere else in the chain). Police stopped doing this job because it was too difficult...and they had the powers, why people think banks can do it is beyond me. The stuff you read online about low integrity or not caring is just obvious nonsense (it wasn't why police failed in the first place, police cared a lot, they just weren't as good as the money launderers so blamed banks).
  - mistrial9 4y ago
    thank you for this post -- overall, I would add a personal "unsubstantiated claim" that a big, big part of new additional requirements, micromanagement, constant ID problems and moving the goal posts regarding cash flows is .. insiders at credit and banking, ex-finance career money handlers and others wearing a uniform, executing and getting away with financial theft. Ordinary citizens with "a life savings" are far more rare than "college educated with a gambling habit" insiders on the business side of money, forging, smearing and blaming while pocketing the results. I believe I saw this in the USA with VISA credit, mortgages and other forms of personal finance, leading up to the 2007 meltdown. Second rant part - regulatory compliance boils down to a "pain game" in so many old industries.. We know 'x-y-z' is happening but we shut it down when we find it, versus, 'newly promoted enforcement official needs to show success now' motivated audits, new regulations and 45-day decrees. All players at a certain size are guilty but the question is intent, awareness and effort to curtail. Bluntly, the expression is "sh* rolls down hill" .. meaning that the least able, least aware and least mobile get stuck with additional restrictions, burdens, in some cases fines or entrapment, while Big Business shows up to work again tomorrow.

emmanuel_1234 4y ago

This is spot on. Although I disagree with the removal of AML/KYC regulation, this is indeed the reason why it's so complicated. HSBC was fined heavily and only came out of judiciaral control recently because they didn't care enough about money laundering. All the banks are scared to shit to be pinned by the regulator now, so that's what you get.

skippyboxedhero 4y ago
I used to work in wealth management, I worked in research but once you see how this stuff actually works...why? The issue with HSBC wasn't related to them not caring enough, what happened is that some employees in their Mexican office essentially went rogue. HSBC can't blackmail their staff, money launderers can. HSBC can't bribe their staff with suitcases full of cash, money launderers can. HSBC can't threaten to execute your kids, money launderers can. And, again, even if you assume this all isn't true...banks do not have the investigatory powers. People who want to launder money do not turn up a bank with a briefcase full of cash, and wink repeatedly at the cashier when handing it over...they put substantial resources in disguising the source, and working out where the gaps are (with HSBC, it was currency exchange...this has been a weak spot for decades because it is mostly used by large corporates and there is an assumption that AML happens somewhere else in the chain). Police stopped doing this job because it was too difficult...and they had the powers, why people think banks can do it is beyond me. The stuff you read online about low integrity or not caring is just obvious nonsense (it wasn't why police failed in the first place, police cared a lot, they just weren't as good as the money launderers so blamed banks).
- mistrial9 4y ago
  thank you for this post -- overall, I would add a personal "unsubstantiated claim" that a big, big part of new additional requirements, micromanagement, constant ID problems and moving the goal posts regarding cash flows is .. insiders at credit and banking, ex-finance career money handlers and others wearing a uniform, executing and getting away with financial theft. Ordinary citizens with "a life savings" are far more rare than "college educated with a gambling habit" insiders on the business side of money, forging, smearing and blaming while pocketing the results. I believe I saw this in the USA with VISA credit, mortgages and other forms of personal finance, leading up to the 2007 meltdown. Second rant part - regulatory compliance boils down to a "pain game" in so many old industries.. We know 'x-y-z' is happening but we shut it down when we find it, versus, 'newly promoted enforcement official needs to show success now' motivated audits, new regulations and 45-day decrees. All players at a certain size are guilty but the question is intent, awareness and effort to curtail. Bluntly, the expression is "sh* rolls down hill" .. meaning that the least able, least aware and least mobile get stuck with additional restrictions, burdens, in some cases fines or entrapment, while Big Business shows up to work again tomorrow.