Michael Held: Keynote remarks at Union of Arab Banks’ anticorruption conference Keynote remarks (delivered via video conference) by Mr Michael Held, Executive Vice President and General Counsel of the Federal Reserve Bank of New York, at the Union of Arab Banks' Conference on Anti-Bribery Corruption, the Sixth European Union Anti-Money Laundering Directive, and the Anti-Money Laundering Act of 2020, 3 February 2022. * * * As prepared for delivery It is a pleasure to be with you virtually for this important Conference. I am thrilled to be able to share a digital stage with my distinguished colleagues – Liz Rosenberg, the Assistant Secretary for Terrorist Financing and Financial Crimes at the U.S. Treasury Department, and Dr. Fahad Ibrahim Alshathri, the Deputy Governor for Supervision at the Saudi Central Bank. I also want to thank my friend Wissam Fattouh and the Union of Arab Banks for the invitation to be part of this timely event. Before I start my remarks, I want you to know that the comments are my own and may not necessarily represent the views of the Federal Reserve Bank of New York or the Federal Reserve System. Like my colleagues and our respective institutions, I have serious concerns about corruption, kleptocracy and international bribery schemes. The Federal Reserve System supports the U.S. government’s actions to limit those activities through prosecutions and sanctions.
The general principle is straightforward: it consists in ensuring that supervision manages to limit risks for the stability not only of a particular institution, but also of the entire financial system. Its implementation, however, is complex. For the moment, we are only at a preliminary stage, contemplating which tools a macro-prudential policy could be based on, and how these tools could be used. As regards supervision, this crisis has shown three things. First, it has highlighted the merits of having the banking supervisor close to the central bank. The point is not to claim there is an optimal supervisory structure that fits any country’s circumstances. Rather, it is to note that a system such as the one we have in France has proved very useful in allowing for an in-depth knowledge of the banking sector and the various financial institutions. It also allowed for very swift and timely exchanges of information, and, as a result, allowed us at the central bank to quickly pass sensitive judgments, not least on the usefulness of injecting liquidity. Second, the crisis also revealed that, as far as supervisory infrastructure is concerned, simple, robust and pragmatic plans have shown their efficiency. Thirdly, the crisis stressed the need for supervisory structures to adapt to their environment. This is very true for Europe. I guess it is also true for other countries and regions.