Global financial institutions have been fined over $36 billion since 2008

At the close of the decade, global fines for non-compliance with Anti-Money Laundering (AML), Know your Customer (KYC) and sanctions regulations have exceeded $36 billion since the financial crisis of 2007-2008. 

2019 saw a sharp increase in regulatory fines levied against financial institutions. Of the $36 billion in fines amassed since 2008, roughly $10 billion of non-compliance fines were awarded in 2019. 

Many of these fines were related to sanctions. 40% of the non-compliance fines enforced in 2019 were related to trade sanctions, amounting to almost $4 billion. Global trade tensions caused by the reverberations from the America-China Trade War are likely to blame for this high number. 

Notably, 2019 also saw a significant amount of fines implemented for non-compliance with the second Markets in Financial Instruments Directive (MiFID II) and the Global Data Protection Regulation (GDPR). Fines relating to these regulatory frameworks amounted to $82.7 million.

In 2019, the big banks were some of the worst offenders. Of the world’s top 50 banks, 12 were fined for non-compliance with AML, KYC and sanctions violations in 2019. Swiss and Italian banks had the highest value of fines levied against them. Italian banks amassed around $1.5 billion in fines, while Swiss bank UBS was fined a massive $5.1 billion for AML breaches by the French Criminal Court. 

Failures in transaction reporting also accounted for a decent share of the $10 billion in non-compliance fines enforced in 2019. Two significant fines enforced by the Financial Conduct Authority (FCA) for insufficient transaction reporting in the decade preceding MiFID II account for roughly $81.5 million. 

Taking all these fines into account, 2019 was the second-biggest year for fines levied against financial institutions. With financial regulations becoming continuously more stringent, economists are predicting that 2020 will not see a decrease in non-compliance fines.


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