NEWS
IBS Journal March 2018
11
Hong Kong Monetary Authority releases challenger bank guidelines
T
he Hong Kong Monetary Authority (HKMA) has released a set of guidelines for online banks looking to set up in the autonomous territory.
New ventures must have a minimum of HK$300 million ($38 million) and will be unable to impose a minimum account balance. This is according to draft guidelines set out by the authority, for which it will receive feedback on 15 March.
In a media briefing attended by the South China Morning Post, Arthur Yuen, the deputy chief executive of the HKMA, said that “overseas experience” had shown that virtual banks can have successful operations.
“We expect virtual banks will focus on retail and SME businesses, but we will not require what type of services they must offer to customers,” he said. “They could choose their business scope, ranging from payments, deposits and loans, to wealth management and other lending.”
New entrants can apply for licences now, though the HKMA has outlined some restrictions to prevent them using “predatory” tactics in the market.
Virtual banks will have to have at least one physical location within the autonomy, and will be unable to offer “extremely low prices or excessively high interest rates to aggressively compete for market
Hong Kong: as many as 10 institutions have expressed interest in opening virtual operations in the autonomous territory
share”. Entrants will also need to have a solid exit plan in the event of a collapse, and have to join the deposit protection scheme.
According to the South China Morning Post, as many as 10 local and overseas institutions have expressed interest in opening virtual operations in Hong Kong. These include technology firms without a banking arm as well as traditional banks that want to set up virtual bank units.
U.S. Bank slapped with $613m charge for money laundering failures
U
S. Bank has been charged $613 million by the Manhattan US Attorneys Office in New York, the Office of the Comptroller of the Currency, the Federal Reserve and the Financial Crimes
Enforcement Network.
Between 2009 and 2014, the bank set a cap on the amount of suspicious transaction alerts that could be dealt with by staff. Court documents show U.S. Bank’s anti-money-laundering officer warning that employees responsible for investigating the alerts were “stretched dangerously thin”.
U.S. Bank, the fifth-largest lender in the US by assets, hid this cap from federal regulators. In one instance, an employee left mention of the
cap out of meeting minutes, to ensure it would not be picked up by watchdogs. Dana Ripley, a U.S. Bank spokesman, told the New York Times that most of the senior employees involved in the practice in 2014 were no longer at the company.
Andy Cecere, president and CEO of U.S. Bank, issued a statement saying that the bank needed to “do better”. “We are confident in the strength of the (anti-money laundering) program we have in place today,” he said.
The bank has fully reserved for the penalties, and faces no further action. The settlement includes a two-year non-prosecution agreement.
www.ibsintelligence.com
chiaoyinanita / pixabay
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