The Financial Stability Board (FSB) has published its latest progress report on the implementation of its four-point action plan to assess and address the decline in correspondent banking.
The report includes a set of deliverables for 2017 to help slow down the widespread termination of correspondent banking relations, a process substantially caused by increasing costs of anti-money laundering and countering financing of terrorism (AML/CFT) compliance and banks’ increasing determination to avoid heavy fines for AML/CFT non-compliance.
Action plan
The report by the international organisation established to monitor and assess vulnerabilities affecting the global financial system describes progress in its four-point action plan published in November 2015.
It calls for further examination of the dimensions of the problem, and its causes and effects; the clarification of regulatory expectations; domestic capacity-building in jurisdictions that are home to affected respondent banks, and strengthening tools for due diligence by correspondent banks.
Major survey
Since an August progress report, the FSB’s Correspondent Banking Coordination Group (CBCG) has conducted a survey of national authorities and banks to collect additional information on correspondent banking.
Authorities in some 50 countries participated in the survey, collecting data on approximately 300 banks.
The survey is intended to provide additional evidence to support a deeper understanding of the causes and consequences of the decline in correspondent banking relationships, and thereby help to inform the policy responses and initiatives underway to address the issue.
The year ahead
By April 2017, the FSB says it will publish findings from the CBCG survey on correspondent banking while the FSB and SWIFT will set out a process for ongoing monitoring of trends in correspondent banking.
By March 2017, the FSB says it will publish suggested main elements of the communications strategies that jurisdictions could implement to effectively communicate the steps taken to improve their AML/CFT frameworks.
The FSB’s latest progress report can be found here
The FSB’s August progress report can be found here
Categories: Trade Based Financial crimes News
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