Bank supervisors seek work on terror funds

The world's top banking supervisors this morning called for more action to deprive terrorists of funding by sharing information…

The world's top banking supervisors this morning called for more action to deprive terrorists of funding by sharing information and cracking down on informal money transfer networks.

Mr Jaime Caruana, head of the Basel Committee on Banking Supervision, and Claes Norgren, president of the anti-money laundering body Financial Action Task Force (FATF), said the private sector urgently needed to cooperate more to "drive terrorists out of the financial system".

The two officials, writing in the Financial Times, said banks needed to know their customers and customer profiles, report suspicious transactions, and respond to official inquiries by searching global customer databases.

"The FATF has now embarked on a new push to drive terrorists out of the financial system by strangling their funding sources," the two wrote in a commentary.

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The attacks on Madrid on March 11th had already prompted new initiatives, the supervisors said.

One initiative will intensify supervision of so-called alternative remittance systems, or informal networks, often run with little more than a telephone or a fax, that facilitate unregulated cross-border money transfers.

Charities and non-profit organisations also needed more supervision to ensure that they were not used for illegal funding.

Mr Caruana is also the governor of the Bank of Spain and a member of the European Central Bank's interest-rate setting board.

"In order effectively to combat terrorism and terrorist financing, it is important to work closely with countries that have experienced terrorism first-hand," the two wrote.