| HONG KONG
HONG KONG Aug 7 Banks are being penalised too
harshly for lapses in anti-money laundering efforts, Standard
Chartered Plc's head of Asia operations said - the
second senior bank executive this week to voice frustration over
what many in the industry see as overzealous regulation.
StanChart said on Wednesday that a computer error in a
surveillance system which forms part of its anti-money
laundering controls, would likely to lead to a fine and remedial
action. It is also set to result in an extension of a two-year
monitoring period imposed on the bank in 2012 for breaking U.S.
sanctions by hiding transactions linked to Iran.
"Banks have been asked to play the role of policing
anti-money laundering...(but when) we have a lapse we don't get
treated like a policeman, we are treated like a criminal,"
Standard Chartered Asia CEO Jaspal Bindra said in an interview
with Reuters on Thursday.
His remarks follow comments on Monday by HSBC Chairman
Douglas Flint, who argued that regulators' zeal to punish
wrongdoing was putting the bank's staff off taking reasonable
business risks. Rules that were too harsh could hurt lending in
areas such as commercial banking where products can be
complicated, he said.
Industry sources have also warned of unintended consequences
from the regulatory clampdown, including the threat that lending
will be cut to people or businesses in poorer countries.
Bindra said StanChart has addressed its compliance problems
by hiring more staff and embarking on a multi-year program to
make all 89,000 of its employees more aware of the importance of
compliance and anti-money laundering.
The new fine could be between $100 million and $340 million,
a source familiar with the matter has previously told Reuters.
"The issue is not so much about whether the U.S. is wrong or
right, you have fines in every country, every regulator has
fines, but it's the level of fines that is quite difficult for
banks," Bindra said.
In the 2012 case, StanChart paid a combined $670 million in
settlements to U.S. authorities.
HSBC was fined $1.9 billion in 2012 for breaching U.S.
sanctions on money laundering in Mexico, and has pulled out of
business areas and countries, including Panama, to cut the risk
of future problems.
U.S. authorities have imposed penalties on at least 10
European banks and financial firms for violating U.S. sanctions
in regard to countries that include Iran, Sudan and Cuba.
(Reporting by Lawrence White; Editing by Edwina Gibbs)