London Daily

Focus on the big picture.
Thursday, Sep 17, 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
Asthma Charity Warns of Major Gaps in Childhood Diagnostic Testing Across England
TUC Chief Paul Nowak Appointed to Bank of England Court
Bristol Opens £35 Million Deep-Tech Innovation Hub at Temple Quarter
Oxfordshire Village Votes Symbolically to Leave UK Over Asylum Housing Plan
Andy Burnham Deepens UK Defense and AI Cooperation With NATO and Canada
UK Government Announces Neonatal Safety Reforms After Thirlwall Inquiry
Bank of England Weighs Rate Decision as UK Inflation Rises to 3.1%
UK Health Unions Warn of Staffing Pressures as Public and Private Pay Growth Diverges
Rockstar Games Faces Tribunal Claims From 23 Former Grand Theft Auto VI Developers
UK Treasury Faces Tighter Budget Constraints as Borrowing Costs and Pension Spending Rise
Prime Minister Andy Burnham Sets Out Ten-Year Plan for Greater Public Oversight of Utilities
UK Economy Grows 0.4% in July as Services and Technology Activity Strengthen
Scotland, Wales and Northern Ireland Leaders Coordinate Push for UK Constitutional Change
Police Tighten Public-Order Measures After Anti-Immigration Protests in Dover and Portsmouth
UK Ministers Pressed for Answers After US Diplomat Accused of Child Abuse Images Leaves Britain
Jaguar Land Rover Pursues NATO Defense Contracts for Defender Vehicles
British Service Member Dies in Road Accident While Deployed in Ukraine
George Osborne Calls for Britain to Rejoin EU Customs Union
Anthropic Chief Dario Amodei Urges Faster UK Action on Advanced AI Risks
UK State Pension Set for 3.9% Rise Under Triple Lock
UK Labour Market Cools as Payrolled Employment Continues to Decline
Reform UK’s £72 Million in Donations Faces Scrutiny Under Proposed Retrospective Funding Rules
UK Doctors Warn Expanded Pharmacy First Scheme Could Put Patients at Risk
British Airlines Cut Short-Haul Capacity as Jet Fuel Costs Rise
UK News Publishers Forecast 40% Search Traffic Drop as AI Overviews Expand
Axel Springer Wins Approval for £575 Million Daily Telegraph Acquisition
London Mayor Sadiq Khan Opposes Heathrow Third Runway Over Climate Targets
Scotland, Wales and Northern Ireland Leaders Hold Summit Seeking Greater Autonomy
UK Energy Price Cap Set to Rise to £1,723 in October
UK Treasury Warns Middle East Conflict Is Threatening Economic Growth
Labour Moves to Retrospectively Cap Overseas Political Donations After Reform UK Funding Surge
HMRC Warns Nearly Seven Million Adults Are Unclear About State Pension Entitlements
UK Parliament Passes Sovereign Grant Reform Before Conference Recess
British Rail Passengers Gain Automatic Right to Switch Operators During Disruptions
Burnham Hosts Downing Street Business Summit as UK Fiscal Pressure Builds
Labour Government Moves to Challenge £72 Million in Reform UK Crypto Donations
UK Advertising Industry Warns Wider Junk Food Rules Could Put £1 Billion in Media Spending at Risk
Cornwall Opens Devolution Talks With UK Government Over Transport and Local Services
UK Parliament Considers Sovereign Grant Reform Setting Royal Funding at £99.9 Million
Trades Union Congress Calls for Income-Based Energy Tariff Funded by Higher Bank Levy
UK Prime Minister Rejects Second Scottish Independence Referendum
House of Lords Begins Scrutiny of Bill to Lower UK Voting Age to 16
Anthropic Says Claude Was Exploited in Weapons-Related and State-Linked Cyber Activity
Institute of Directors Urges UK Government to Avoid Business Tax Increases in Autumn Budget
Rising Gilt Yields Cut UK Fiscal Headroom to About £13 Billion Ahead of Budget
UK Economy Grows 0.4% in July as Services and Technology Activity Strengthen
UK Government Promises Clearer Student Loan Guidance After Repayment Backlash
Charities Warn Unpaid Carers May Die Before Receiving Government Compensation
Dover Unrest Prompts Review of UK Counter-Extremism Strategy
Celtic Summit Leaders Reassert Right to Pursue Independence From UK
×