Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, when the Financial Conduct Authority last reviewed the performance of banks in managing high risk money-laundering situations.

The Financial Conduct Authority (FCA) conducts anti-money laundering supervision on a risk-sensitive basis, meaning that it focuses on those firms, including banks, which present the highest level of money laundering risk. For example, firms in its highest risk band, which include major banks, are subject to an in-depth ‘systematic AML Programme’, which operates on a four-year rolling cycle and lasts several months, whereas firms that are in lower risk categories are subject to regular on-site inspections and/or visited on an events-driven basis or when they are part of a thematic review.

The FCA does not comment on its ongoing AML supervision of banks, but publishes the findings of its thematic reviews, the latest of which considered how small banks manage high ML risk situations and was published in November 2014. It found that most small banks are failing effectively to manage ML risk. The results of thematic reviews are published on the FCA’s website: http://www.fca.org.uk/your-fca/documents/fsa-aml-final-report and http://www.fca.org.uk/news/tr14-16-how-small-banks-manage-money-laundering-and-sanctions-risk