If you’re a bank, surely no amount of cash can be worth the reputational damange one may suffer?
The news that Coutts has been fined £8.75 million for ‘serious, systemic’ failures in its anti-money laundering measures and controls over high-risk customers and politically exposed persons. What this means is that because they didn’t check properly, Coutts *may* (and only may) have accepted money from foreign criminals and dictators.
I don’t want to comment on Coutts, because there’s no evidence that they did take any filthy lucre, but it is yet another reminder that after the increased post-financial crisis regulation and the end of global banking secrecy, as prophesied at the G20, banks are under greater scrutiny than ever about their clients in terms of tax avoidance/evasion and the source of the wealth.
Witness those banks who accepted Libyan assets and justly had to fork them over to the new Libyan government. Consider the African despots with groaning vaults in Switzerland. And don’t forget those HNWs fleeing major banks to cantonal banks and the shady fiduciary insitutions of unlikely islands.
These affairs are being pursued not just by governments and regulators but by tax-justice and anti-corruption campaigners around the world, all relentless pursuers of revenue and right.
If a bank has accepted money from someone it shouldn’t have, intrusive regulation and suspicious governments, armed with tax information exchange agreements, will bring it to light. If you’re a bank, surely no amount of cash can be worth the reputational damange, let alone the fine, one may suffer?