The primary supervisor of U.S. national banks will soon publish guidance "reiterating" how financial institutions can manage compliance risks posed by their foreign correspondent clients, the agency's chief said Wednesday.
Global financial institutions, regulatory agencies and industry groups should develop and adopt standardized know-your-customer requirements to reduce due diligence costs tied to correspondent transactions, central bankers said Wednesday.
Financial institutions have yet to develop a practical method to evaluate and limit the compliance vulnerabilities that political figures and high-risk businesses pose, according to a U.K. study published Tuesday.
An intergovernmental watchdog group is set to issue new guidance on cross-border transfers, virtual currencies and other categories of customers and transactions that many banks associate with high regulatory and legal risks.
Short of abiding by the Community Reinvestment Act and other prohibitions against discriminatory lending, banks still have the right to choose who they'll do business with. While that seems like an obvious statement, it gets drowned out in the debate about "de-risking."
A number of large U.S. and international banks are dropping customer accounts and services tied to high-risk geographical regions and lines of business in response to regulatory pressure, including enforcement actions.
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