The risks put down in black and white in a letter from Financial Stability Board Chairman Klaas Knot sent to finance ministers and central bank governors. Financial crime at the centre of the first summit of Intesa Sanpaolo's Afc Digital Hub. McCaul (ECB): "We need adequate supervisory authority"
13 Jul 2022
Crypto assets are "heavily exposed to fluctuations in market confidence, and this makes them an unreliable store of value." Words of the chairman of the Financial Stability Board, Klaas Knot, in a letter sent to the G20 finance ministers and central bank governors, which underlines how "recent events have highlighted the potential fragility of the so-called stablecoins".
"The G20 comes at a time of growing challenges for financial stability. Lower growth, rising inflation and tighter financial conditions could crystallize pre-existing weaknesses in the global financial system, and bring new ones to light," Klaas Knot continued. "A resilient global financial system is essential for strong and sustainable global growth," he added, highlighting the need to "be vigilant", as an "unexpected deterioration in economic conditions could be a test of financial resilience".
Index of topics
• The AFC Digital Hub for the fight against financial crime
• Traceability of transactions and anti-money laundering measures
• The importance of a cooperative approach
The AFC Digital Hub for the fight against financial crime
A theme also addressed this morning in the Intesa Sanpaolo skyscraper in Turin, for the first event organized by the AFC Digital Hub (Anti Financial Crime Digital Hub), the consortium to combat financial crime with new technologies and artificial intelligence created by the Bank with Intesa Sanpaolo Innovation Center, the University of Turin, the Polytechnic of Turin and CentAI. At the center of the event is the fight against financial crime through artificial intelligence, which allows the development of solutions and models to identify suspicious phenomena attributable to illegal activities, from money laundering to terrorism, from market abuse to fraud.
At the opening of the meeting, the Chairman of Intesa Sanpaolo, Gian Maria Gros-Pietro underlined that "technology is an essential tool to combat an increasingly sophisticated and digital crime. Intesa Sanpaolo has been investing for years in technology to combat these phenomena", in particular money laundering and terrorism.
Traceability of transactions and anti-money laundering measures
Among the speeches also Elizabeth McCaul, Supervisory Board Member of the European Central Bank, who focused on the fight against financial crime – for example money laundering activities, including through cryptocurrencies – in Europe and on the opportunities deriving from the use of artificial intelligence. "Banks active in services related to crypto assets must adequately understand the risks related to money laundering and terrorist financing and adopt appropriate internal control and governance arrangements to mitigate them. To this end, we need to have an adequate supervisory authority and avoid loopholes in the regulatory framework," McCaul said. "Some companies may not be fully included in the regulatory framework and thus fall outside the scope of the Anti-Money Laundering Directive," he added. "Another area of concern," McCaul pointed out in his speech, "concerns the world of cryptocurrencies and in particular the traceability of transactions, as well as the lack of suitable measures on Anti-Money Laundering and Counter-Terrorism by many counterparties involved in these assets."
Alessandra Perazzelli, Deputy General Manager of the Bank of Italy, spoke about the Fintech Hub, the accelerator of digital change of the Bank of Italy's Milan Hub dedicated to companies that offer digital solutions to innovate financial, banking and insurance services by leveraging new technologies and new approaches. "We want there to be an orderly development of activities that use technology and that can be innovative for consumers, bring economies of scale and price reductions," he explained. "On June 15 – recalled Perrazzelli – we wanted to issue a communication on decentralized finance and crypto assets. We wanted to give the market, while waiting for a harmonized European legislation, some indications of behavior", he concluded.
The importance of a cooperative approach
"The ultimate goal is to create a system conducive to innovation and open to other banking and financial operators, then create a system and have a cooperative approach as desired by the FATF (International Financial Action Task Force) and the European Banking Federation. We are already doing this with Unicredit, with which in recent weeks we have implemented an initiative related to the CRIF to synergize the collection of information on companies". These, however, are the clarifications of Piero Boccassino, chief compliance officer of Intesa Sanpaolo, speaking of the objectives of the AntiFinancial Crime Digital Hub.
"Intesa Sanpaolo is an articulated group called upon to play its part in the fight against financial crime: we have more than 1200 people who deal with compliance and about half dedicated to Anti-Financial Crime. Alongside this commitment, we constantly make investments to update our solutions, investments in the order of tens of millions of euros. For the Consortium we have seconded about thirty people and we have a budget of about a couple of million a year", continued Boccassino.
The cycle of speeches was opened by the chairman of Intesa Sanpaolo, Gian Maria Gros-Pietro. "Criminal phenomena in the financial sector are of absolute importance. They are rightly at the top of the European Commission's agenda, and technology is an essential tool, I would say the instrument of election, to fight an increasingly sophisticated and increasingly digital crime", added Gros-Pietro. "Intesa Sanpaolo has been investing for years in technology to counter these phenomena. We have developed advanced skills, with highly innovative features for the fight, in particular, of money laundering and terrorism", he concluded.