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Banks feel Panama heat

Friday, April 08, 2016 - 01:42

Banking watchdogs across Europe have begun checking whether lenders have ties to a massive document leak from Panama that showed how offshore companies are used to stash clients' wealth. As Kirsty Basset reports, the move puts pressure on an already battered sector.

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Banks are under scrutiny, as the impact of the leaked 'Panama Papers' continues to reverberate around the globe. Banking watchdogs across Europe have started checking whether lenders have ties to Panama law firm Mossack Fonseca, which specialises in setting up offshore companies. In Britain, the FCA has asked 20 banks and firms to check if they have any links. Swiss body FINMA says banks need to do more to clamp down on money laundering. And some are demanding answers from banks mentioned in the leaked documents. (SOUNDBITE) (French) FRENCH FOREIGN AFFAIRS MINISTER, JEAN-MARC AYRAULT, SAYING: "Societe Generale has to explain itself, that's what (Finance) Minister Michel Sapin asked, and that's what it will do. I note that in other countries it's not one bank, it's tens of banks that are affected. These grey areas have to disappear, because if not then there is no more confidence." Thailand's anti-money laundering body is the latest to announce an investigation - in this case into 16 people mentioned in the documents. But will the mounting pressure lead to change? (SOUNDBITE) (English) IG, MARKET ANALYST, CHRIS BEAUCHAMP, SAYING: "It will I think push regulators and governments around the world to exert greater control over what their citizens do. But that is still very very difficult. These jurisdictions are there, they do exist and fundamentally what most people have done is not illegal as currently defined. So it will take a long time to reform tax codes around the globe to actually sort of iron out these inconsistencies." The ICIJ says nearly 15,600 shell companies were registered with Mossack Fonseca by more than 500 banks.

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Banks feel Panama heat

Friday, April 08, 2016 - 01:42