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Major Indian Private Sector Banks, HDFC Bank, ICICI Bank and Axis Bank - Running A Huge Nation-wide Money Laundering

Cobrapost's Shocking Mega Expose: Major Indian Private Sector Banks, HDFC Bank, ICICI Bank and Axis Bank, Are Blatantly Running A Huge Nation-wide Money Laundering Racket “
(www.cobrapost.com )

While we have not verified the truth in the above instance, the latest development relating to Anti-Money Laundering, KYC violations is a real cause of concern.

Canada’s Bank Regulator Targets “Operational Risk” in 2013

Quoted in the Wall Street Journal recently, "Canada’s top financial watchdog intends to press the big banks next year on how well prepared they are to deal with so-called “operational risk”–one of the most difficult risks to protect against."

We now know that operational risk is a major risk factor, a silent killer in its own way. It does not damage a limb, or an organ, it goes for the kill straight away.

Largest Financial Services Fines

So, who is the top on the list of Regulatory penalties and Fines. IT is none other than HSBC. It was fined US$ 1.9 Billion on Money Laundering lapses. ITs activity in Iran resulted it dear. I would not say that the fine was a surprise given that if HSBC chose to operate in Iran, it was very well aware of this lapse.

Next comes the Libor manipulation fine for UBS. Infact, Libor related fines will continue for sometime. we can expect this list to become Top 100 fines soon.

Overall, most of the fines relate to operational risk, Compliance issues and AML/KYC.

Regulation Takes a breath

Things are not so solvent in Basel. In other words, Solvency II and Basel III are both likely to get delayed compared with original timelines.

"The European Commission (EC), regulatory agency for the European Union (EU), announced on December 3 that it will not comply with a previously-established deadline for Basel III adoption of January 1, 2013."

Social Media Risk and Reputation Risk - How one feeds into the other

Reputation and Reputation Risk

It is a well known fact that possibly one of the most valued asset for any organisation is its reputation. The brand that has the ability to generate future revenue business for the entity. Firms with larger reputation values find it easier to find customers and sell to these customers. So, we can freeze on one concept as part of this discussion. The concept that Reputation is the most important element of a company and loss of reputation is equivalent to loss of potential business and even the cause of bankruptcy.

Social Media

Flash Crash = Fat Cash

Flash Crash = Fat Cash

So, we all know Flash crash it. Ask anyone and the answer you are likely to get back is that it is something that goes wrong due to which stock price crash or increase significantly and reverse out at the same speed. Flash crash are usually due to erroneous trades or "Fat Finger errors" where trades that were not intended are released to the Stock exchange and executed.

But this discussion is not about why it happens, or what happens, but rather what are the consequences of it.
Three obvious consequences are as follows
1. Media enjoys it and publicises it a lot

Risk Management Training

Risk culture is something that cannot be build overnight. It is not something for which you can hire a consultant and then make a magical transformation just like that.

Research has shown that one of the most effective elements to improve risk culture is continuous and relevant risk managment training. Operational risk is predominantly people and the more training that is imparted to them, the more likely the related operational risk are going to be mitigated.

To learn more about how Riskpro can help with Risk Management training,please email manoj.jain@riskpro.in for more details.

Risk Managers in great demand - Growth to exceed 40% annually

The demand for risk managers is growing and likely to continue to grow for the next 5-10 years. More and more companies are focusing on risk management services.

"The demand for risk managers has picked up in the last 3-4 years. Banking and financial services sector, telecom are looking into investing seriously on risk managers, boosting the demand for such professionals by at least 30-40 per cent annually," Hill & Associates (India) Country Manager Shalini Chakravorty told reporters.

LIBOR Scandal rules the world

Lots of action lately…Price manipulation, “Power market” manipulation, LIBOR rigging, management exits, resignations, frauds and the like. We may not know the depth of these malpractices, but one thing we do know is that it is unfortunate that the best of the Banks with the best of the Corporate Governance /Risk management systems also do it. Is it greed or is it call of the survival during global recession…Its anybody’s guess.

Money Laundering Regulations are simply Black and White

We have been reading about a lot of Money Laundering scrutiny recently. HSBC is in depp trouble and had to pay massive penalties. Now we have Standard Chartered Bank accused of non compliance with US OFAC regulations by supporting Iranian businesses conduct transactions out of SCB's NY office.

While these are serious situations, one thing is pretty clear. There is a distinction between the two instances.

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