UK regulator turns proactive enforcer

AML compliance in UK financial services is a “serious concern”, the Financial Conduct Authority admits in its first annual report on the subject.[1] The regulator could hardly do otherwise in view of the manifold failures spelt out in every thematic review conducted to date. In the report, the FCA revisits the appalling findings of its predecessor’s June 2011 review of banks’ management of high money laundering risk situations [2], noting that three quarters of banks were failing to address the risk adequately. Around a third were prepared to take on ML risk if they believed that the immediate reputational and regulatory threat was ‘acceptable’, the FCA’s word; ‘low’ would serve as well. Four banks have already paid a price with fines that barely register against, for example, US penalties – £8.75m [3], the highest, could only have symbolic value for Coutts, part of the taxpayer-owned giant, RBS. But there is still one bank in enforcement on the back of the review findings, as well as one other according to the report, so perhaps the first fine to break £10m is pending.