The Panama Papers leak continues to resonate across the globe with revelations, both salacious and otherwise, about the hiding of vast sums of wealth through shell corporations. One of the fallouts from these revelations has been the bank counterparties involved in the worldwide shell game to hide assets—both ill-gotten and legitimate. For even if a shell company is created, the money must be laundered somewhere by someone. That someone is usually a bank.
Banks’ roles in money laundering have been the subject of several huge enforcement actions over the past few years. However, it is not clear that the banks have been able to respond in anything like an appropriate manner. As reported in the Financial Times, Deutsche Bank was found by the U.K.’s financial watchdog, the Financial Conduct Authority (FCA), to have “serious and systemic failings in its controls against money-laundering, terrorist financing, and sanctions breaking.” These conclusions were made based upon a “catalogue of shortcomings at the bank, ranging from missing documents and a lack of transaction monitoring to inappropriate pressure put on staff to take on certain clients.”
