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Treasury Official to Banks: Manage Risk, Don’t Avoid It

Jaclyn Jaeger | November 20, 2015

During remarks this week at the American Bankers Association and the American Bar Association Money Laundering Enforcement conference, Treasury Acting Under Secretary Adam Szubin provided some clarity on de-risking and anti-money laundering controls.

Szubin defined “de-risking” to mean “instances in which a financial institution seeks to avoid perceived regulatory risk by indiscriminately terminating, restricting, or denying services to broad classes of clients, without case-by-case analysis or consideration of mitigation options.” Typically, de-risking is discussed in the cross-border context, but the term may be applied to some domestic financial relationships as well, he said.

Rather than simply dumping risks, Szubin said banks should address it. “We believe that most risks can and should be managed, not simply avoided altogether,” he said,...

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