Large banks need to clearly delineate which senior executives are responsible for Bank Secrecy Act compliance violations, the U.S. Comptroller of the Currency said in a speech Monday.
The Federal Reserve cited Germany's second-largest bank Thursday for broad deficiencies in its anti-money laundering program, including insufficient risk-ranking, suspicious activity reporting and bulk cash controls.
Since 2008, federal financial regulators have increasingly quizzed compliance staff about such scenarios in an effort to determine how banks are distinguishing their low-, moderate- and high-risk clients, according to bank officials.
Financial institutions should elevate their risk ratings on transactions with entities in Russia as tensions between it and the U.S. and Europe intensify, according to risk management analysts.
Reaching the point where an off-limits, high-risk jurisdiction becomes bankable is a complex compliance process involving many factors, including political and economic stability, country reports by international watchdogs and old-fashioned shoe leather, say former bankers and consultants.
The OCC has asked financial institutions to submit comments about the data collection system, which the agency says is designed to "enhance the ability of examiners and bank management" to identify money laundering risks in bank products, services, customers and locations.
The Financial Action Task Force identified key elements of gauging geographic and other risks and of defining acceptable threat levels to aid governments and financial institutions adopting a risk-based approach to their anti-money laundering programs.
Treasury Secretary Henry Paulson, speaking Friday at the Financial Crimes Enforcement Networks headquarters, announced initiatives that include a more risk-based examination process and a narrower definition of the money services businesses industry.
Henry Paulson, at a meeting scheduled for Friday at the Financial Crimes Enforcement Networks headquarters, will disclose plans to improve risk-based exam procedures for institutions, people familiar with the matter said.
A survey of 34 government entities and large banks by the Financial Action Task Force suggests they don't agree on how institutions should adopt the risk-based approach, whereby banks identify their risks then allocate anti-money laundering resources to the most vulnerable areas.