Another bank has been hit with accusations of major non-compliance issues. Standard Chartered has been accused from the New York State financial regulator that it operated as a 'rogue institution' and exposed the US financial system to ‘terrorists’ and ‘drug kingpins’ by working for the Iranian government for almost 10 years. The regulator claims that the bank has moved $250 billion for the Iranian government while Bank answers that they acted according to the U-turn directive and in fact erred only by much smaller amount of $14 million.
The regulator is concerned with transactions carried out by the bank, known as ‘U-turns’, in which certain transactions for Iranian clients were permitted until 2008 as long as they originated with offshore, non-Iranian foreign banks. If the transactions didn’t comply with strict regulations the money would be frozen by US clearing banks.
Until now Standard Chartered has managed to keep its reputation clean in the wake of the Libor-fixing debacle and money laundering scandals shaking other major banks.
The question is what could Risk Management or compliance function in banks do to prevent such situations and improve bank's reputation. Share your thoughts and ask questions. Let us know what you think, hate, and want to change by placing your comment here
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