FIBA conference review. Latest banking issues discussed

This year marked the ninth edition of the prestigious conference organised by the Florida International Bankers Association in Miami, held at the Intercontinental Hotel in Miami. The Cayman Islands Financial Services Association reports. Second and final part.

IBA’s conference has always managed to present the best speakers from government and the private sector to discuss topical issues. And with all the developments over the last few months, more than ever, it was fundamental for professionals in the industry to hear what these speakers had to say.

One of the most anticipated presentations in the programme was that of the representative of FinCEN (the US agency charged with collecting and sharing information about suspicious transactions and money laundering cases).

Jamal El-Hindi, Associate Director, mentioned their efforts to address comments made by a recent FATF review of the US AML regime without creating excessive regulatory burden. In that aspect it was comforting to learn that even the mighty US struggles to comply with all the requirements being imposed in the financial services industry today. When one considers that the Cayman Islands has managed to address similar comments and to remain competitive, that should serve as a testament to the jurisdiction’s capabilities.

Another highlight of the programme was the presentation by Lester Joseph, Principal Deputy Chief of the Criminal Division of the US Department of Justice. He commented on the recent UBS settlement (which included fines applied to the Bank and the agreement to disclose information about their US customers to US authorities), and on another case where Lloyds Bank was heavily fined for admittedly concealing information contained in wire transfers involving countries under US sanctions such as Iran, Libya and Sudan to allow these payments to go ahead undetected.

Joseph alerted the audience to the fact that the financial crisis will expose more cases of criminal activity and fraud in the financial industry and that banks will become more vulnerable to civil litigation if the criminals or fraudsters had transactions in the bank that should have been detected and reported. For that reason compliance and early detection of suspicious activities can save a bank considerable amounts of money in the long run.

CIFSA’s Chairman Eduardo D’Angelo P. Silva participated in a panel titled ‘AML Issues in Latin America and the Caribbean’. The panel was chaired by Guillermo Horta Montes of Citigroup in Mexico and also had Marco Victorica of Consultcom S.A., a consultancy firm based in Buenos Aires (Argentina).

The chairman opened the panel with a presentation about “Know Your Employee”, the actions that financial institutions must take to guarantee that their customer’s data will not be compromised by failed internal security and/or unscrupulous staff members.

It was followed by a speech from Silva which focused on presenting a profile of the financial industry in the Cayman Islands, from its humble beginnings in the 1960s to its present status as one of the most prestigious and best regulated financial centres in the world.

He also shared some practical advice on how compliance officers should approach doing business with offshore companies and what information they should make sure to obtain before accepting them as customers.

Victorica analysed the challenges of implementing meaningful AML programmes in countries where part of the economy is informal, i.e. does not use banks or other financial institutions. His presentation drew great interest as he cited the economy of Argentina as an example where 60 per cent of the economic activity is informal, mostly due to the lack of confidence in government and the high level of taxation.

He postulated that similar situations exist in most countries of the world outside the “rich club” of the US, Western Europe, Australia and Japan. He also showed on a world map that informality, lack of democracy and lack of government transparency go hand in hand, and that the solution for one problem would have to include the others.

Silva commented: “FIBA has had a special relationship with the Cayman Islands for many years. The Cayman Islands Bankers Association and CIFSA actively promote their conference locally and have always had an important presence in terms of speakers and attendees. This year I had the privilege of representing Cayman on this panel of AML initiatives in Latin America and the Caribbean and can once again confirm the interest that our part of the world attracts in the US”.

The conference ran for two days with several general sessions and other break-out panels where more specific topics were discussed in depth by specialists and the audience. Additionally, more than 30 sponsors and exhibitors had booths set up where attendees could learn about products and services available to the financial services industry. Eduardo Silva’s presentation to the conference can be viewed on the CIFSA website at www.caymanfinances.com

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Guillermo Horta Montes of Citigroup in Mexico; Eduardo D’Angelo P. Silva, Chairman of CIFSA; Marco Victorica of Consultcom S.A. in Buenos Aires, Argentina

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