Ideas to Action:

Independent research for global prosperity

Views from the Center

CGD experts offer ideas and analysis to improve international development policy. Also check out our Global Health blog and US Development Policy blog.

 

Can Technology Solve the De-risking Problem?

In recent years, regulators have raised their expectations for what counts as adequate AML/CFT compliance. At the same time, they have cracked down on institutions that have fallen short. While arguably necessary, this more stringent enforcement has produced some unintended side effects. In particular, it has put pressure on banks’ ability and willingness to deliver certain types of services, notably correspondent banking services.

Financial Stability Board Echoes CGD Finding on Decline in Correspondent Banking

The Financial Stability Board's long-awaited report finds that the number of active CBRs has declined by 6 percent since 2011 and has continued through 2016, affecting all regions and major international currencies. The analysis suggests that small economies are among the most affected by CBR withdrawal. The bottom line: the decline of correspondent banking relationships, especially with smaller and poorer countries, remains an important policy issue.

Progress Towards Reducing the Unintended Consequences of Anti-Money Laundering Policies for Poor Countries

Last November, we released a report on the unintended consequences of anti-money laundering policies for poor countries that focused on remittances, corresponding banking, and the delivery of humanitarian aid. Today, we are pleased to report progress towards reducing the negative, unintended consequences of anti-money laundering (AML) regulation, despite the shadow cast on the international development community by Brexit. One significant policy change from the Financial Action Task Force (FATF) and three new reports give us reasons to celebrate a little, even when there is much work to be done.