Banking watchdogs across Europe have begun checking whether lenders have ties to a massive document leak from Panama that showed how offshore companies are used to stash clients’ wealth.
Switzerland’s financial watchdog FINMA said on Thursday that banks must clamp down on money laundering, as the Geneva prosecutor opened a criminal probe.
Four decades of documents from Panamanian law firm Mossack Fonseca, which specializes in setting up offshore companies and has offices in Zurich and Geneva, showed widespread use of those instruments by global banks and triggered investigations across the world.
“Do I think we are where we should be in fighting misuse in the financial system? No,” FINMA Chief Executive Mark Branson told Reuters following its annual news conference.
“We think in some ways the risks in Switzerland have risen, not fallen, and that there is more that can be done. We don’t want to see large scandals involving Swiss banks.”
Switzerland is the world’s biggest international wealth management center with around $2.5 trillion in assets and has taken on more wealth of late from emerging markets, from which it is harder determine the origin of assets, Branson said.
Britain’s Financial Conduct Authority said on Thursday it has written to 20 banks and other financial firms, giving them until April 15 to spell out any involvement they have with the “Panama Papers”.
HSBC, Britain’s biggest bank and its affiliates created more than 2,300 shell companies with Mossack Fonseca, according to the International Consortium of Investigative Journalists. HSBC has dismissed suggestions it used offshore structures to help clients cheat on their taxes.
Also on Thursday, France’s ACPR financial regulator said it has told French banks to hand over extra information about their business ties with tax havens.
German regulator BaFin is likewise probing the role of Germany’s banks, a source told Reuters on Monday.
Watchdogs in Sweden, Netherlands and Austria said earlier this week that they were looking into banks named in the papers.
The chief executive of Austria’s Hypo Landesbank Vorarlberg became one of the first top bankers to quit over reports based on the data leak on Thursday, though he denies his bank violated any laws or sanctions.SHOW MORE