Regulators to dig deeper into worries over money-laundering checks. With larger banks cutting ties with smaller ones leaving the smaller banks with no or limited global banking options will this lead to international payments going underground?
(Reuters) - Global regulators will try to get more insight into why major banks are withdrawing from handling cross-border payments, making it harder for people to send money to relatives and loved-ones abroad. Banks say it has become more costly to comply with tougher customer checks against money-laundering and terrorist financing, putting pressure on regulators to ease up.The Financial Stability Board (FSB), which coordinates regulation across the Group of 20 economies (G20), says it is worried that fewer major banks are offering smaller banks correspondent relationships, the links which enable such remittances. Banks' reluctance to handle smaller cross-border payments could drive some flows underground, potentially hurting economic growth and hampering financial inclusion, as well as damaging the stability and integrity of the financial system.