ABSTRACT
Second, I will discuss the key new regulations that impose anti-money laundering obligations on US financial institutions. These obligations have been superimposed on the performance of normal banking activities. Society has determined that national security requires banks to play a part in responding to this need, much as airlines have been given the responsibility to participate in the screening of passengers and their belongings before permitting them to board. It is useful also to consider the inordinate foreign demand for US banknotes as a source of large cash deposits in US banks that constitute one of the roots of the money laundering problem. In this context I refer to the Federal Reserve’s Extended Custodial Inventory Program although it involves only financial institutions that have accepted a contractual agreement to participate in this programme, not the entire class of financial service institutions.
