Regulators only recently fingered correspondent banking as a weak point in the payments chain, through which illicit funds can enter. Earlier this year in America, the slackness of correspondent banking practices-failure to vet and block transfers of suspicious funds—was made public in Senate committee hearings. It embarrassed and humbled some of the biggest American banks into taking corrective action. In Britain, the Financial Services Authority will have more powers, from December 1st, to prosecute negligent banks that are used for money laundering and cannot produce documents to show that they went through the proper controls. All the same, short of putting entire offshore-banking regimes beyond the pale, little can be done that does not involve, to a considerable degree, banks trusting in each other's due diligence.
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