CGD Policy Blogs
Last November, a CGD working group of experts convened to address the unintended consequences of anti-money laundering (AML) policies for poor countries, where they recommended that the Financial Stability Board (FSB) should take the lead on addressing problematic de-risking by banks. Below, we outline our takeaways on the FSB’s progress thus far.
Lifting the trade and investment embargo on Cuba is a laudable policy objective that would allow Cubans better access to American goods and services. It might also give American businesses a boost, including from places that could do with one, like rural Louisiana. Changing the law will be an uphill struggle unless November’s elections transform Congress. But even if Congress can agree, changes to the law might not be sufficient to convince investors to go to Cuba.
Over the past couple of weeks Malawi has become the latest poster child for UK campaigns arguing that changes to the international tax system can deliver outsize returns for development. Specifically, Action Aid is calling on the UK government to renegotiate a 60-year-old tax treaty. Questions were also raised about this issue in the House of Commons.
Two World Bank Surveys Provide (Imperfect) Evidence that De-risking Might Be Hurting Developing Countries
The World Bank recently released the results of two separate surveys aimed at gauging the extent to which de-risking is a problem. The headline result is that banks around the world are closing accounts of money transfer organizations (MTOs) and are severing links with banks in other countries. These careful, timely reports provide crucial evidence that de-risking is a very real phenomenon and that we should be worried about it.
Recently, CGD launched a major report about how laws designed to prevent money being sent overseas to terrorists and criminals can also have unintended consequences for innocent people in developing countries. Dr. Nathan Sheets, US Under Secretary of Treasury for International Affairs, called for banks and policymakers to "commit significant resources and take on new responsibilities" in order to address this challenge.
Last Thursday, Under Secretary of the US Treasury Nathan Sheets spoke at CGD about anti–money laundering policies and the problem of de-risking, in connection with the launch of a new CGD working group report on the unintended consequences of anti–money laundering policies for poor countries. Sheets’s comments were consistent with the report’s key recommendations including the need for better data and for clearer guidance from financial regulators and standards setters.
Are Anti–Money Laundering Policies Hurting Poor Countries? – Podcast with Clay Lowery and Vijaya Ramachandran
Are laws designed to prevent money laundering, terrorism-finance and sanctions violations unintentionally hurting people in poor countries? That’s the question a recent CGD Report seeks to address.
Next week, the G-20 Leaders will meet in Antalya, Turkey, to continue their conversation about the importance of financial inclusion in achieving strong, sustainable, balanced economic growth. One item on the agenda will be the cost of remittances. In 2009, G-8 Leaders set a goal of reducing remittance costs to 5 percent within 5 years, roughly a 5 percentage point decrease.