It can happen without warning: you’re standing at a checkout counter when your card suddenly refuses to work. Debit, credit, all of them blocked. Behind that moment of panic lies a system in which banks play a frontline role in combating money laundering and terrorist financing, explains Jerry Grbic of the Luxembourg Bankers’ Association (ABBL).
It’s all linked to strict rules banks have to comply with, Grbic explains. “Unfortunately, ordinary customers who have nothing to do with it can also fall victim to the checks banks are required to carry out.” If documents expire, if bankers stop hearing from clients, or if there’s no explanation for a transaction that appears unusual for that customer, “then an account may be blocked.”
How often such cases occur is not reflected in official figures. What is clear, however, is that stricter rules at EU level are leaving banks with ever less leeway.
“In recent years, a great many rules, European directives and Luxembourgish laws have been put in place,” says Jerry Grbic of the ABBL. “Banks risk penalties or, in the worst-case scenario, even losing their licence if they do not comply.”
At the same time, however, there are also voices in Europe warning against excessive regulation. They are calling for banks to be able to operate more flexibly and in closer alignment with reality.
There is acknowlegment of this in Brussels, says the ABBL. However, there are still no concrete avenues for loosening the rules. The ABBL, in any case, is working on proposals on how regulation could be simplified without creating additional risk.
