FSA slams investment banks for poor anti-bribery data

Regulator to take action as the banks also fail on preventative systems

The Financial Services Authority (FSA) has heavily criticised investment banks for failing to maintain the right anti-bribery and corruption data, or implement decent preventative systems.

The regulator said it was ready to act on those banks that did not comply with the rules, and that some firms could already be in line for penalties. It also issued fresh guidance to the entire financial services industry.

Nearly half of investment banks do not have adequate anti-bribery and corruption (ABC) risk assessment, and management data is usually "poor", the FSA found in its report. The regulations require banks to track and take action on any risk of bribery and corruption, before it even happens.

The report followed inspections of eight of the largest investment banks operating in the UK, as well as seven smaller firms. It found that the majority of firms were failing to properly implement effective anti-bribery and corruption systems and controls.

Tracey McDermott, acting director of enforcement and financial crime at the regulator, said: "It is imperative that firms have adequate arrangements to control the risks of financial crime."

She added: "Overall, despite the high profile of the issue, the investment banking sector has been too slow and too reactive in managing bribery and corruption risks."

Photo credit: KrakenHammer

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