Issue 8
September 2024
Welcome to the MBA's News Digest!
Dear readers,
Mauritius Central Bank’s Monetary Policy Committee (MPC) slashes Key Rate by 50 basis points, citing the ongoing disinflationary process as conducive to a lower policy rate.
In global news, Europol, and the Basel Institute of Governance co-organise a conference for the prevention and misuse of the crypto ecosystem; while cryptocurrency-related fraud accounts for more than $5.6 billion losses in 2023, states a report by the Federal Bureau of Investigation.
Best wishes,
The MBA team
Cryptocurrencies and financial crime: a strategic approach to ensure security
12 September 2024
‘The presentations and panels revealed emerging ways in which crypto assets and innovations are abused to facilitate organised crime. While cryptocurrencies pose no greater intrinsic risk than more traditional assets and value transfer systems, their unique features can be leveraged to facilitate ransomware attacks and other cybercrime, which can affect critical infrastructure and services. Speakers revealed cases of sophisticated misuse of crypto assets for money laundering, sanctions evasion, terrorist financing and nuclear proliferation, each carrying significant implications for both national and global security.’
Cyber Risk Quantification — a valuable tool for today's CISO
11 September 2024
‘Cyber Risk Quantification (CRQ) has emerged as a valuable tool for doing just that— defining and articulating risk in financial terms. It’s powering decision making whilst providing greater understanding of the return on investment, thus making the organisation more cyber resilient. More than just a “nice to have,” CRQ is becoming necessary for many organisations as boards, governments, and regulatory bodies push for greater accountability. For example, the UK government is suggesting organisations treat cyber risk the same way they would financial or legal risk, complete with a proposed code of practice for governance. CISOs understand the risks and implications but communicating them clearly to the rest of the organisation can be challenging.’
New rules for banks to deliver financial stability and investment
12 September 2024
‘The Basel 3.1 reforms are the final part of the internationally agreed Basel 3 framework. Today’s proposals, announced by the Prudential Regulation Authority (PRA), mark the end of the post-2008 crisis capital reforms and give the certainty industry will need to invest for growth…. Banks and building societies will have to maintain sufficient capital against risks, such as loans not being repaid, to protect people and businesses from the fallout from a 2008-style financial crash.’
Cambodian banks breach covenants as bad loans surge
13 September 2024
‘Three large Cambodian financial institutions have breached covenants on their borrowings, and more may follow in their footsteps as the number of bad loans rise, warned S&P Global Ratings. Covenant breaches refer to when financial institutions fail to meet certain conditions– such as financial ratios– stipulated in borrowing agreements with institutional lenders. In Cambodia, ACLEDA Bank, Hattha Bank, and LOLC (Cambodia) have all breached their covenants. This follows after a spike in non-performing loans (NPLs) exhausted the buffers of the banks, said Ivan Tan, S&P Global Ratings analyst.’
US regulator orders Wells Fargo to overhaul its efforts to combat illicit funds
13 September 2024
‘Wells Fargo shares slid on Thursday after a U.S. banking regulator found its safeguards against money laundering and other illegal transactions were too lax and restricted its ability to expand in risky businesses. The California-based bank, which has been under intense scrutiny since a 2016 fake accounts scandal, saw its stock close down 4%, paring a 6.5% loss after the Office of the Comptroller of the Currency announced the action earlier in the day…. The regulator said the lender’s controls were deficient in identifying and preventing money laundering and sanctions evasion including measures to learn about customers and flag potentially suspicious transactions.’
Swiss banks fret over sanctions risk to wealth business
12 September 2024
‘A survey of Swiss banks has highlighted international sanctions imposed on other countries, such as against Russia over Ukraine, as the greatest geopolitical risk to their business…. The report by the Swiss Bankers Association (SBA) and consultants zeb said on Thursday that Swiss policymakers should develop an approach to sanctions that ensures neutral Switzerland remains a safe haven for banks and their customers.’
FBI: Crypto-related fraud losses increased 45% in 2023
11 September 2024
‘ “The exploitation of cryptocurrency was most pervasive in investment scams, where losses accounted for almost 71% of all losses related to cryptocurrency,” the FBI said. “Call center frauds, including tech/customer support scams and government impersonation scams, accounted for about 10% of losses associated to cryptocurrency.” The decentralized nature of cryptocurrency, the speed of irreversible transactions and the ability to transfer value around the world make it an attractive vehicle for criminals and create challenges for recovering stolen funds, the FBI said. “Rapid and accurate complaint reporting are key to assisting law enforcement in investigating fraud schemes that exploit cryptocurrencies,” it added.’
ABA Foundation Joins with Government Agencies to Launch New Infographic Warning Consumers about Cryptocurrency Scams
11 September 2024
‘According to new data from the FBI, an estimated $5.6 billion was lost to cryptocurrency-related scams in 2023, a 45% jump from the previous year. As a part of these scams, criminals target victims through texts, dating sites, social media platforms, professional networking channels or other apps. They may build fake profiles or use technology to mask their identity, all while working to establish a connection and trust with their victims. Criminals will then introduce cryptocurrency and coach victims into investing using fake platforms that can look legitimate.’
Framing financial crime as a security threat
16 September 2024
‘Crimes like corruption and fraud are not victimless, even if the victims are sometimes hard to identify. Financially motivated crimes like the trafficking of drugs, humans and weapons cause immense harm to individuals and threaten the stability and security of whole societies. The same is true for environmental crimes like the illegal trade in wildlife and timber, which are now finally being recognised as a form of financial crime.’
Banks required to list suspect accounts for better supervision
17 September 2024
‘Currently, the Ministry of Public Security’s Department of Cyber Security and High-Tech Crime Prevention (A05) has deployed a solution to establish an online connection information system with commercial banks and payment intermediary organisations. From there, information about suspected fake and fraudulent accounts from the police will be sent to banks so that transactions on online channels can be suspended immediately. In order to promptly control and detect accounts with signs of fraud and law violations, banks have built a contact centre system to receive customer feedback, an anti-money laundering system, and a separate fraud prevention system. In addition, banks have also applied many methods and different levels of response to suspicious accounts. If the authorities identify the account as having committed a violation, transactions on the online channel will be blocked.’
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