Wall Street Has Developed A Healthy Fear Of Some Of The World's Riskiest Regions

Hasbro-parker-brothersThere are places in the world where even Wall Street investment banks must be careful to tread, at least that's what they're coming to realize.

According to the Financial Times, banks are scaling down certain activities in high risk areas like the Middle East and Asia. This makes sense if you've been paying attention. Over the last year, bank after bank has been hit with sanctions for laundering money for unsavory actors in certain parts of the world.

Perhaps the quote, “You f—ing Americans. Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians?” rings a bell to you?

It obviously does to Standard Chartered (they were sued by the U.S. government for money laundering last summer) and to other banks across Wall Street that have decided that they cannot trust their local partners in certain regions.

From the FT:

“We’re closing down certain relationships,” one top London-based banker said.

Another added: “It’s about cost versus volume. Increasingly, the cost of policing a relationship can outweigh the commercial benefits.”

Citigroup and JPMorgan are among the US banks to have retreated from a number of so-called correspondent banking relationships across several countries in the Middle East, Africa and Asia, aware that they cannot vouch for the integrity of local partners.

HSBC, which paid out a $1.9 billion fine for money laundering charges that read like the plot of a James Bond film, will also be scaling back its activities.

Head to the FT for more on this>