Regulators seek to ease banking worries over money-laundering checks

Wed Jul 13, 2016 9:14am EDT
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By Huw Jones

LONDON (Reuters) - International regulators will write new banking rules for checking whether a potential customer poses money-laundering or terrorist financing risks.

The move is part of efforts by the world's central banks to stop cross-border banking from fragmenting under the weight of tougher anti-money-laundering rules which have prompted some lenders to pull out of markets.

The Committee on Payments and Market Infrastructures (CPMI), made up of central bankers from across the world, said on Wednesday that lenders want greater clarity on how to comply with mandatory anti-money-laundering checks of customers.

The aim is to create "know-your-customer" utilities, or data bases, that would obtain information on customers from across the banking sector for use by all banks. This would save time and money by avoiding many checks on the same customer.

CPMI said it would ask the International Organization for Standardisation to define the basic set of information that all such utilities would collect and that all banks have to be ready to provide to other banks.

Banks have also asked for assurances from regulators and law enforcement authorities that lenders can rely on information from utilities for complying with anti-money-laundering and terrorist financing rules.

CPMI said the Basel Committee of banking supervisors and the global Financial Action Task Force will look at ways to support the use of utilities.

CPMI published five recommendations to address fragmentation in so-called correspondent banking, the cross-border web that allows people to move money from one country to another.   Continued...

Arrangement of various world currencies including Chinese Yuan, US Dollar, Euro, British Pound, pictured January 25, 2011 REUTERS/Kacper Pempel/Illustration/File Photo