In 1985, irregularities at the Bank of Boston sparked a spate of fines for the largest US banks after authorities discovered widespread failure to disclose interbank transactions totalling hundreds of millions of dollars. Then, the recipients were Swiss banks. Now, the Senate is primarily concerned about correspondent relationships with banks based in offshore centres, but the findings of both reports that banks are turning a blind eye to dirty money, or just not looking very hard are exactly the same. We don t spend all day thinking up a system that you can t get around. Balancing the interests of bank customers who want speed and privacy with the interests of regulators and governments who want monitoring and customer awareness has proved difficult for the institutions caught in the middle.
Many observers see the two demands as incompatible.
He says it would be possible to build a completely secure system, but notes that such a system would be practically useless in the world of correspondent banking, where everything revolves around swift execution. The scale of the business is tremendous. In the 21 business days so far this year, the main US clearing house for interbank payments, has handled just under five million transactions. But banks can t just ignore the government s desire to stamp out money laundering. As with other security decisions, says Rica, the real trick is to define an acceptable level of risk .