Singapore and Hong Kong were the biggest destinations for suspect transactions in Asia, even though the financial centers saw just a small fraction of an estimated US$2 trillion in potentially dodgy money flows revealed in a report.
Singapore processed US$4.4 billion in suspicious flows through banks, including DBS Group Holdings Ltd, Oversea-Chinese Banking Corp (OCBC) and United Overseas Bank Ltd (UOB), the International Consortium of Investigative Journalists (ICIJ) said in an investigation published on Sunday.
About US$4.1 billion was handled in Hong Kong by lenders including HSBC Holdings PLC and Deutsche Bank AG, the ICIJ said.
The two banking centers are followed by China and India in Asia in terms of the size of suspect flows, according to the report based on a trove of documents that was leaked to BuzzFeed News.
The Monetary Authority of Singapore is “closely studying” the revelations and “will take appropriate action based on the outcome” of its review, it said in an e-mailed statement yesterday.
The Hong Kong Monetary Authority said that it was also aware of the report, but does not discuss individual cases.
The territory’s framework for combating money laundering and counter-financing of terrorism is “effective and in line with international standards,” a spokeswoman said in an e-mail.
Bank shares were hammered by the revelations, which added to a litany of woes for HSBC, pushing Europe’s largest bank to the lowest in more than two decades.
Banks in Singapore also slid, with DBS’ shares extending their loss for the year to 24 percent yesterday. OCBC and UOB also closed slightly lower.
In an e-mailed statement, DBS said it has “zero tolerance for bad actors abusing the financial system,” but that it is “generally very difficult to delay or intercept money in transit given the impact on legitimate business” unless there are sanctions on names or account freezes.
OCBC and UOB said that their frameworks for detecting illicit flows are “robust.”
HSBC on Monday said it started a “multi-year journey” eight years ago to overhaul its ability to fight financial crime in more than 60 jurisdictions, making it “a much safer institution than it was in 2012.”
Deutsche Bank said that ICIJ raised “a number of historic issues” and those related to the bank are “well known” to regulators.
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