January 20, 22 Will Banks Now Open Their Doors?

(idexonline.com) - Diamonds may be a girl's best friend, but they can also be a criminal's. There are so many different ways to exploit rough or polished gems, at so many points along the pipeline. But are banks and financial institutions using an over-sized hammer to crack a medium-sized nut by imposing a blanket set of AML (anti-money laundering) rules on all diamond traders - and beyond - with little regard for the welfare of the many innocent parties who suffer as a result? The European Banking Authority (EBA), a Paris-based arm of the EU, seems to think so. In a legal opinion published earlier this month it suggested they'd gone too far in closing the door to entire sectors - not just diamonds but also gambling operators, FinTech firms and even embassy staff. And it warned that the rush by banks across Europe to de-risk could actually prove to be counter-productive, leading to the creation of a shadow financial system that is actually harder to regulate.