€22bn in lender firm fines since 2008

€22bn in lender firm fines since 2008

Pádraig Hoare

Financial institutions across the world have paid $26bn (€22bn) in fines for failures in money laundering and customer verification, and sanctions since the global financial crash, a new report has found.

Dublin-headquartered financial data management firm Fenergo found the US accounts for nearly 44% of all global regulatory anti-money laundering and so-called know-your-customer fines, yet almost 91% of the total value at over $23.5bn.

Separately, Central Bank statistics show the Irish watchdog has imposed 121 fines, totalling €63.9m, since 2007.

The Central Bank imposed no monetary penalties on any firm in 2006, and only €5,000 in 2007.

€22bn in lender firm fines since 2008

However, 10 firms were fined €3.69m in 2008, and it reached a high in 2016 when nine firms were fined over €12m.

Fines in relation to money-laundering breaches in the Republic have totalled over €12m since the Anti-Money Laundering (Criminal Justice Act) of 2010.

Europe overall has imposed 83 fines, totalling $1.7bn, with the majority being imposed by the UK‘s Financial Conduct Authority, found the Fenergo report.

It found that $204m in fines was imposed by the UK watchdog in 2017, the highest yield by far of the last decade.

Asia Pacific regulators have levied 79 fines, worth almost $609m, since 2011.

Fenergo said the Middle East still lags behind other regions for financial enforcement, recording just $9.5m in the last 10 years.

The US Department of Justice is the most punitive regulator in the world when it comes to imposing financial penalties for non-compliance, according to the Fenergo report.

The department levied half of the global fines and sanctions for anti-money laundering failures at nearly $14bn, followed by the New York Department of Financial Services at $3.6bn.

US regulators have hit foreign banks hard, said Fenergo, imposing fines on European banks nearly five times that imposed against US banks.

Over $11.5bn in fines was imposed in 2015, making it the most punitive of the past decade. The highest single fine ever levied against a bank by one regulator, at $8.9bn, was imposed on French giant BNP Paribas in 2015, by US authorities, for sanctions violations.

Fenergo director of global regulatory compliance Laura Glynn said: “Up until now, the focus of regulators had been on the US and European markets. However, we are now witnessing regulators in Asia Pacific and the Middle East markets becoming more proactive in their supervisory efforts.”

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