Rosenberg: Banks on ‘front lines’ of identifying financial crimes

In terms of understanding risk and risk exposure, financial institutions are on the front lines and serve as the eyes and ears to regulators in providing critical insight on emerging illicit finance threats, Elizabeth Rosenberg, U.S. assistant secretary for terrorist financing and financial crimes, said today during the ABA/ABA Financial Crimes Enforcement Conference. “The information you report to us helps to influence, shape and inform our actions, whether it is new policy guidance, enforcement actions or advisories to help both the public and private sectors better understand the risks in front of us and craft the appropriate responses,” she told attendees.

Rosenberg outlined many of those risks during her remarks, from the financial threats posed by Russia to the use of real estate in anti-money laundering schemes. She also cautioned banks on excessive de-risking, noting that when financial institutions refuse to do business with entire geographic regions or business segments, it can drive business toward entities with less stringent compliance and oversight mechanisms. To address this issue, Rosenberg said the Treasury Department is working on a strategy that will include recommendations on how to improve public-private engagement on the issue, regulatory guidance and adjustments, and international supervision.