[valuearb]

This is a very poor example then, it’s a mish-mash of accusations that misrepresents the obligations of banks and ignores the rights of account holders.

Just filing a SAR doesn’t obligate a bank to freeze the funds, that’s a job for regulators. Taking your funds away just because of wrong headed suspicions should be illegal, but happens regularly and this “article” excoriates bank’s first not doing it more often.

[doonesbury]

Agree. Quoting "documents identify more than $2 trillion in transactions between 1999 and 2017 that were flagged by financial institutions’ internal compliance officers as possible money laundering or other criminal activity — including $514 billion at JPMorgan and $1.3 trillion at Deutsche Bank." Banks told regulators. They didn't do anything and the article doesn't ask why

[corford]

Not sure I agree. It's an extremely effective peice of reporting that shows not only that AML enforcement, as it exists today, is fundamentally broken and easily subverted but also gives a good overview of the perverse incentives, banking and political, that cause it (and the scale of the task needed to fix it).

Nothing in the article suggests "taking people's funds away". The main focus is how meaningless and small the incentives are for major banks to "do the right thing" and the horrendous effects them turning a blind eye has on countries and their populations.

I'm sure the big banks (i.e. those with a global footprint and offering U.S. correspondent accounts - essentially the primary enablers for global laundering) would behave very differently if they faced the real prospect of being whacked with a large regulatory stick (e.g. being cut from USD payment/clearing networks or fines of 5% of global revenue and personal criminal records for the worst offenders within their ranks).

The problem is it's not only Russian kingpins and corrupt Ukranian politicians who need their money laundering. An awful lot of financial corruption also exists/originates within the West. Overhauling and fixing a system that aids and abets all these powerful entities is not easy.

[valuearb]

Banks are constantly being whacked with sticks, but that will never prevent a tiny percentage of millions of bank employees from accepting bribes to subvert their banks controls.

This price is entirely one sided and ignorant of the damage those regulations inflict on honest bank customers. The hundreds of thousands who’ve had accounts closed, or funds seized, without explanation or recourse.

When professional journalists write a one sided advocacy piece ignorant of the damage the course they advocates causes, they are also advocating more aggressive account seizure and system lockout for innocent customers, whether they realize it or not.

[hakfoo]

I wonder if it's a scale problem at its heart.

A single-branch local bank could legitimately know their customers on a personal basis and their dealings. Joe-bob comes in with $12k in cash? But we already knew through social circles he just sold his truck, so that's not really suspicious. The guy who has never interacted with anyone outside the county and is suddenly requesting wire transfers to Outer Slobavia? Likely money mule.

I doubt that HSBC can maintain that level of awareness, so we build clunky rules to simulate it.

[valuearb]

Correction: the transfer to outer Slobavia is much more likely for poor family. But the bank will refuse it to minimize their exposure.

[rootsudo]

Agreed, the video and on surface reading is very much not what compliance/regulation enforcement action that banks really do.

And then it's the hot potato, what is trust in a banking system if your money doesn't show up? What about holding the funds itself, creates a liability problem for the bank?

I also am surprised this was written by "Buzzfeed news" too.

--

I haven't dug into it fully, but, surface wise, it's truly a misrepresentation of the financial system, SWIFT, FEDWIRE and remittances.