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Banking association targets financial crimes
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09:25, November 04, 2008

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Bankers and financial experts at the 55th congress of the International Banking Security Association (IBSA), held recently in Beijing, agreed on the growing importance of joint efforts by international financial institutions to fight against financial crimes in uncertain global financial markets.

This is the first IBSA congress held in China and Bank of China is the first bank on the mainland that has become an IBSA member.

The last decade has witnessed quickening economic globalization and development of Internet technology, adding to the fact that financial crimes not limited to one country or region.

Financial experts said financial crimes nowadays are taking diversified forms and have complicated tactics, which add to the difficulty of ensuring banking system security.

Established in Illinois in the United States in 1981, IBSA targets crime prevention and tracks crimes against credit and financial institutions, including fraud and counterfeiting.

"China is doing a very good job of combating money laundering," said Gordon Kennedy, Bank of Montreal Corporate (BMO) Security in Toronto, Canada. He is also this year's chairman of IBSA.

"The interesting part of the security function in the financial institutions is unlike any other group in the bank," said Kennedy.

"Banks and financial institutions are typically in competition with each other for profit and for business, (but as for) security work, there is no competition between banks. (Instead,) banks often share between each other ideas and programs in order to help each other."

With cooperation and communications among different countries improved, IBSA will absorb more Chinese members to contribute to the development of the association and fight financial crimes, Kennedy said.

"Bank of China, with its highly internationalized financial business, is facing challenges posed by financial crimes," said Zhu Min, vice-president of Bank of China.

Financial experts and analysts have further analyzed the impact of money laundering on the sound development of financial markets as well as the economy.

For much of the last decade, concerned governments operated under a strategy that involved a handful of key countries whose cooperation was essential.

But the traffickers have changed tactics and moved to new locales. Banks are only one portal. They also use securities brokers, insurance companies, and import and export companies. Every means the worlds of business and finance have to offer, linked by wireless and facsimile transmissions, are used today by traffickers.

Financial regulation, supervision and enforcement are needed to expand both to cover transactions that transcend national boundaries and to cover the widening array of types of financial service businesses.

There is a need for a more comprehensive threat assessment. Government and banking systems must exert greater efforts to identify and prevent a wide range of financial crimes, not just drug and non-drug money laundering, but also financial frauds, such as prime bank guarantees.

Financial experts and analysts advocated that consolidated supervision of the international banking system must become a reality for the global financial community.

International banking continues to evolve, both in terms of the worldwide connections among banks, as well as the increasing sophistication of banking methods.

The constant challenge is to ensure that every bank can account for its customers, that every government has laws which ensure the prosecution of financial crimes, and that every society sets a moral and ethical standard for the conduct of commerce, experts said.

Source: China Daily

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