Banks and regulators have a “shared responsibility to expand access to the financial system while protecting it from illicit activity,” Acting Treasury Under Secretary Adam Szubin said at the ABA/ABA Money Laundering Enforcement Conference in Washington, D.C.
In his remarks, Szubin addressed the ongoing derisking trend. While he acknowledged that Treasury has not found evidence that derisking has had a “global systemic impact” on the financial system, he attributed the rise in derisking activity to heightened prudential standards and legitimate risks over uneven AML/CFT standards by banks and jurisdictions throughout the world.
Szubin said Treasury is working to open dialogues with financial institutions, regulators, international organizations and other interested parties across the globe to clarify regulatory expectations, implement standards and provide technical assistance to jurisdictions affected by derisking. He called on the private sector to “continue to take the time and effort to assess [their] controls and the risks presented by individual clients,” and make “conscientious decisions” in cases where they are unable to effectively manage risk.
Read the speech.