Really strong framework on the three-tier architecture. The distinction betwen capital flight at Tier 1 and the shared laundering infrastructure at Tier 2 clarifies why enforcement keeps hitting Western banks even when they think they're just dealing with normal capital flows. Ive been watching the TD Bank and Deutsche cases unfold and the retroactive liability piece is what makes this especially dangerous for institutions that haven't adapted thier risk models yet.
Thanks - that Tier 2 distinction is exactly where I think legacy risk models misfire. Once capital interacts with shared laundering infrastructure, “normal” flows stop being normal very quickly. The retroactive liability piece is regulators catching up to that reality.
Really strong framework on the three-tier architecture. The distinction betwen capital flight at Tier 1 and the shared laundering infrastructure at Tier 2 clarifies why enforcement keeps hitting Western banks even when they think they're just dealing with normal capital flows. Ive been watching the TD Bank and Deutsche cases unfold and the retroactive liability piece is what makes this especially dangerous for institutions that haven't adapted thier risk models yet.
Thanks - that Tier 2 distinction is exactly where I think legacy risk models misfire. Once capital interacts with shared laundering infrastructure, “normal” flows stop being normal very quickly. The retroactive liability piece is regulators catching up to that reality.