London Daily

Focus on the big picture.
Sunday, Sep 20, 2026

Dirty money has ‘metastasized’ within global banking system: regulator

Dirty money has ‘metastasized’ within global banking system: regulator

New York’s top financial regulator says banks and governments have allowed money laundering to “metastasize” inside the banking system and wrap itself “within the guts of financial institutions.”
In an opinion piece released days after the FinCEN Files investigation revealed sweeping failures by global banks to stop illicit money flows, Linda A. Lacewell, the superintendent of the New York State Department of Financial Services, acknowledged that “insiders” have long known that the financial system is “awash with trillions of dollars in dirty money.”

Efforts in the United States and other countries to prevent banks from waving through illicit funds largely rely on a system of self-reporting. Financial firms are required to file “suspicious activity reports” whenever they spot transactions that may be linked to criminal conduct.

But these reports, known in shorthand as SARs, have “become a free pass for banks,” Lacewell wrote in the op-ed, published in Law360, a legal industry news publication.

The International Consortium of Investigative Journalists, BuzzFeed News and other FinCEN Files reporting partners found that big banks often OK’d transfers of suspicious money but didn’t report these transactions to regulators until months or years later — after the money was long gone.

“I think what this set of articles did is put a spotlight on: ‘Is this system working?’” Lacewell said in an interview on Wednesday with ICIJ. “When you create something like ‘Well, here’s a form or document you must fill out under certain conditions,’ that can almost generate a false sense of security that ‘I’ve done what I need to do and everything is fine.’”

Because many big banks process global transactions through their offices and accounts in Manhattan, Lacewell’s state agency plays a big role in overseeing their operations and making sure they are working to combat money laundering. In July, for example, the agency forced Deutsche Bank to pay $150 million in penalties related to its banking relationships with convicted sexual predator Jeffrey Epstein and with two foreign banks involved in money laundering scandals.

Lacewell told ICIJ that many banks do more than just file SARs with FinCEN, the U.S. Treasury’s Financial Crimes Enforcement Network — they carefully vet customers and block tainted transactions.

But she is concerned that a lack of accountability can distort the risk-reward equation within banks.

“Individual bankers are rarely held accountable, so money laundering becomes a source of profits and bank fines become a cost of doing business,” Lacewell wrote. “When the profits exceed the fines, the business choice is easily corrupted.”

The FinCEN Files include more than 2,100 suspicious activity reports filed by banks and other financial firms with FinCEN, the U.S. Department of Treasury’s Financial Crimes Enforcement Network. BuzzFeed News shared the cache of reports with ICIJ, which organized a team of more than 400 journalists from 110 news organizations in 88 countries to investigate banks and money laundering.

The team’s investigation revealed that many global banks have continued to profit from suspect transactions even after U.S. authorities fined them for earlier failures to stem flows of dirty money. In all, an ICIJ analysis found, the documents identify more than $2 trillion in transactions between 1999 and 2017 that were flagged by financial institutions’ in-house compliance officers as possible money laundering or other criminal activity.
Newsletter

Related Articles

0:00
0:00
Close
Ed Sheeran Tour Faces Backlash After Macklemore Is Removed Over Pro-Palestinian Remarks
Vandalism of Traffic Cameras Intensifies Across Parts of England
Nearly 300 Evacuated as Fire Hits Grand Burstin Hotel in Folkestone
King Charles Warns AI Executives About Risks From Uncontrolled Technology
Church of England Apologises for Role in Historical Forced Adoption Practices
UK Debate Over Online Speech Intensifies After Arrest Figures Draw Scrutiny
Oxfordshire Village Holds Symbolic Independence Vote Over Asylum Accommodation Plan
Nigel Farage and Richard Tice Sue National Crime Agency Over Alleged Banking Data Leaks
Apple Introduces Stricter Age Checks for UK Accounts
BBC Cash Reserves Fall 66% to £125 Million as Broadcaster Restructures
McLaren Announces £500 Million UK Investment and Plans 1,000 Jobs
Green Party Wins Historic Gorton and Denton By-Election as Labour Falls to Third
Burnham Government Prepares October Budget Under Growing Fiscal Pressure
UK Energy Suppliers Pull Fixed-Price Deals as Wholesale Markets Turn More Volatile
Bank of England Holds Rates at 3.75% as Middle East Energy Shock Raises Inflation Risks
Addison Lee Founder Loses £20 Million UK Tax Tribunal Case
BrewDog Creditors Face Losses on About £190 Million of Debt
Harrods Seeks to Recover Abuse Compensation Costs From Mohamed Al Fayed’s Estate
Ed Davey Targets Reform UK as Liberal Democrat Conference Opens
Great Britain Retail Sales Rise 0.5% in August
NHS England Approves Life-Extending Treatment for Incurable Breast Cancer
Proposals to Limit NHS ADHD Diagnoses Draw Criticism From Patient Groups
Resolution Foundation Warns of Housing Cost Crunch for Low-Income UK Families
BBC Cash Reserves Fall to Decade Low as Annual Deficit Reaches £121 Million
Millisecond Software Error Triggered Major UK Air Traffic Control Disruption
Twenty Women Underwent Unnecessary Mastectomies During NHS Cancer Care
Sensitive UK Police Data Found Vulnerable to Access by Foreign Actors
British Steel Faces Renewed Pressure for a Long-Term Financial Plan
MPs Urge Government to End Thames Water Restructuring Talks With U.S. Hedge Funds
Andy Burnham Warns of Difficult UK Budget Choices as Inflation Returns to 3.1%
England Tightens School Food Standards With Restrictions on Deep-Fried and High-Sugar Foods
Oxfordshire Village Votes Symbolically to Leave UK Over Proposed Asylum Centre
Michael Marra Elected Leader of Scottish Labour
BBC Cash Reserves Fall Sharply as Financial Pressures Mount
George Osborne Calls for UK to Rejoin EU Customs Union
UK Explores Joining Canada-Led Global Defence Bank
Thirlwall Inquiry Highlights Management Failures Surrounding Lucy Letby Crimes
Parliamentary Committee Calls for New UK Law to Address AI Risks to Human Rights
UK Considers Giving Regional Mayors Greater Oversight of Water Companies
UK Opposition Presses Burnham for Stronger Response to Russian Security Threats
Reform UK Faces Scrutiny Over £72 Million in Donations as Political Finance Rules Tighten
Millisecond Software Failure Behind UK Air-Traffic Outage That Cancelled More Than 2,000 Flights
Bank of England Holds Interest Rate at 3.75% as Energy Prices Complicate Inflation Outlook
Burnham Warns of Difficult Choices in October Budget as UK Inflation Rises to 3.1%
Addison Lee Founder Loses £20.5 Million Non-Domicile Tax Case
BrewDog Creditors Face Heavy Losses After Collapse
Thirteenth Metropolitan Police Officer Dismissed Over Charing Cross Conduct
Oxfordshire Village Votes Symbolically to Leave UK Over Asylum Accommodation Plan
NHS Approves Life-Extending Treatment for Women With Incurable Breast Cancer
Software Defect Blamed for Major UK Air Traffic Disruption
×