Banks face money laundering investigations
As central banks faced dramatic changes in US economic policy, new files leaked by an international group of journalists showed even more evidence of large-scale money laundering.
A large collection of documents from the Financial Crimes Enforcement Network (FinCEN), dubbed the FinCEN Archives, reached investigative journalists worldwide this month, and the focus was clear: illegal activities that went unnoticed.
The documents identified more than $ 2 trillion in transactions between 1999 and 2017 that were flagged by financial institutions’ internal compliance officers as possible money laundering or other criminal activity, the report said. The two main banks are Deutsche Bank , which revealed $ 1.3 trillion of suspect money in the archives, and JPMorgan, which revealed $ 514 billion, according to the analysis. Other lenders include Standard Chartered and Bank of New York Mellon, the report found, with HSBC reporting $ 4.48 billion in transactions.
The ICIJ report is another blow to HSBC, which is also a possible candidate for China’s “list of untrusted entities” that aims to penalize companies, organizations or individuals that undermine national security, according to the Party’s Global Times newspaper Communist.
One example involves HSBC, which continued to allow funds to pass through their accounts, despite being notified of their criminal origin. The bank’s shares fell to a 25-year low on Monday.
Other revelations include many activities linked to the Russian elite using UK banks to avoid Western sanctions.
Central banks around the world continue to deal with coronavirus precipitation in the meantime, and the European Central Bank (ECB) will meet to discuss its response – and possible implications for the euro – this week.
Asian trading opened on a weaker note on Monday, with the Hong Kong Hang Seng Index falling 1.5% – driven by HSBC shares reaching their lowest level since 1995.
A similar image came from Europe, with Stoxx Europe 600 falling 1.6%. In the United States, before the opening bell, S&P 500 futures fell 1%.
The United States faces a number of problems as politicians struggle to agree on a new stimulus package for the coronavirus and elections are approaching.
This week, Federal Reserve Chairman Jerome Powell will testify before Congress after last week’s speech on the extraordinary progress of the central bank’s economic policy has left many skeptics about its capabilities.
“We are concerned that markets will react badly to some of the uncertainties we face – the election, potentially around Covid-19, and the fact that we do not yet have a stimulus package,” Rebecca Felton, senior market strategist at the manager global asset manager Riverfront Investment Group, told Bloomberg.
“I would have to think that we could be volatile on the negative side here.”