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Big banks need point person for money-laundering lapses: regulator

A man uses a Citibank automated teller machine at a branch in Washington January 19, 2010. REUTERS/Jim Young
A man uses a Citibank automated teller machine at a branch in Washington January 19, 2010. REUTERS/Jim Young

By Brett Wolf and Emily Stephenson

HOLLYWOOD, FL/WASHINGTON (Reuters) - Big banks should designate senior managers to oversee efforts to police transactions for criminal activity and take responsibility when lapses occur, a top U.S. financial regulator said on Monday.

Comptroller of the Currency Thomas Curry said "murky" lines of accountability at the biggest banks in the United States have prevented regulators from determining who was to blame for major anti-money laundering compliance failures.

"Management at large banks needs to eliminate these accreted compliance weaknesses so that institutional structural flaws do not become an excuse for a lack of accountability," Curry said on Monday to a group of anti-money laundering specialists.

Compliance with these rules has become a hot issue after London-based HSBC Holdings agreed to pay $1.9 billion in 2012 to settle claims it flouted rules to prevent money laundering and transactions with countries under U.S. sanctions.

JPMorgan Chase last year settled charges it ignored anti-money laundering laws in its dealings with convicted Ponzi schemer Bernard Madoff, and Citigroup is now facing a probe relating to its Mexico affiliate.

As a result, compliance experts are in high demand. Recruiters say the need at big banks outstrips the supply of qualified people.

Overall, Curry said regulators have seen improvements in compliance efforts at the biggest banks. Many of them have added resources and people to transaction-monitoring operations.

After his speech, Curry said that the person with final responsibility should be higher up in the organization, "someone with stature who can effect meaningful change."

He would not speculate on how that person could be held accountable for lapses and said the change should be made through the supervision process, not by regulatory rule making.

(Reporting by Emily Stephenson; Editing by Bernadette Baum)

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