Shares in Europe’s biggest banks fell on Monday, after leaked documents seemingly showed that some $2 trillion worth of illicit funds were moved and laundered through the global financial systems over a two-decade period.
The papers, released by BuzzFeed and the International Consortium of Investigative Journalists (ICIJ), are based on leaked suspicious activity reports (SARs) filed by banks and other financial firms with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).
The documents encompass more than 2,100 SARs detailing more than $2 trillion in transactions between 1999 and 2017.
Five global banks—
HSBC, Standard Chartered, Deutsche Bank and
Bank of New York Mellon
—kept profiting from “powerful and dangerous players” even after U.S. authorities fined them for earlier failures to curb flows of illicit money, the ICIJ reported.
The banks mentioned in this story said they couldn’t comment on specific transactions due to bank secrecy laws. Their statements can be found here.
SARs are filed to U.S. authorities by financial institutions when internal watchdogs suspect activities like money laundering, insider trading, or corruption are taking place. BuzzFeed News obtained the documents and shared them with the International Consortium of Investigative Journalists.
Looking ahead. Since the leak doesn’t represent anything new to regulators, it is unlikely that it will lead to more fines or charges for financial institutions. However, governments could feel pressure to enact wider regulatory reform if the leak sparks public outcry.
The leak throws the U.K. into the spotlight, with FinCEN calling it a “higher risk jurisdiction.” More than 3,000 companies registered in the U.K. are named in the leak, which is more than any other country. However, reform is unlikely in the immediate future. The world is in the midst of a continuing economic recession brought on by the coronavirus pandemic, and banks are playing an important role in lending. Banks and governments both have bigger and more immediate fish to fry.