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Presentation to the Nassau Conference Baha Mar Convention Center Nassau, Bahamas

This presentation discusses strategies to reduce the risk profile of the Bahamas, focusing on improving financial soundness, ensuring confidential information availability, and suppressing financial crime. It also emphasizes the importance of improved supervision, effective communication, and continuous AML/CFT supervision. The presentation explores various AML rating agencies and their reliance on FATF and INCSR, and suggests both public and private reputation initiatives to manage financial crime risks and secure reputation benefits. Overall, the goal is to enhance the AML/CFT risk management and take national credit for improvements.

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Presentation to the Nassau Conference Baha Mar Convention Center Nassau, Bahamas

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  1. Presentation to the Nassau Conference Baha Mar Convention Center Nassau, Bahamas Reducing The Risk Profile of The Bahamas Charles W. Littrell Inspector of Banks & Trust Companies Central Bank of The Bahamas October 2018

  2. Nassau Conference Sound reputation (old school) • Financial Soundness • Information confidential

  3. Sound Reputation (New School) • Financial soundness • Information available to the authorized • Information unavailable to everybody else • Financial crime suppression

  4. Nassau Conference Improved Supervision Clarity in Supervisory Communication Shift from Analysis to Intervention Continuous AML/CFT Supervision 4

  5. Nassau Conference • International Reputation Management • Job 1: Manage Financial Crime Risk • Job 2: Secure Reputation Benefits • AML Ratings Agencies • Correspondent Banks • Governments, Journalists, Researchers • Crooks

  6. Nassau Conference Other AML Agencies: Weighted Index Ratings • Thomson Reuters / Definitiv • IBM (ex. Promontory) • Basel Governance Institute • KnowYourCountry.com • All rely heavily upon FATF, INCSR • Plus other opinion sources • Nobody measures actual ML incidence

  7. Nassau Conference • AML Rating Agency #2: U.S. State Department • INCSR Vol 1 & Vol 2 • U.S. Legislative Requirement • Not an AML Risk Rating System • - Doesn’t claim to be • - But used that way 7

  8. FATF Mutual Evaluation Rankings 8

  9. Why is FATF (just slightly) Less Than Perfect? • No empirical grounding, particularly ML estimates • Opinion rather than fact based • Punishment rather than prevention focus

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  14. Nassau Conference Correspondent Banks • Strategy: Accurate, cheap information • Public Forums • Private Forums

  15. Nassau Conference • Public Reputation Initiatives • Annual AML / CFT Conference • Annual AML/CFT Publication • National AML/CFT Website • Ratings Agency Research • Quantitative, Objective AML Research

  16. Private Reputation Initiatives • Annual Board Letters • Financial soundness and AML Risks • Available to Correspondents

  17. Nassau Conference Summary • We must get better at AML/CFT Risk • We must get better at taking national credit for the improvement • There are few easy and no quick answers

  18. Nassau Conference THANK YOU! Any Questions?

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