But was the Concordat based on a false premiss: that the division of supervisory-labour during peacetime can carry smoothly over to the only period that really matters, distress? Because, as it happens, neither standard resolution regimes for commercial banks nor any super-SRR of the kind I have just outlined for going-concern restructurings could be applied easily to the cross-border activities of LCFIs. SRR tools cannot automatically be applied extraterritorially. It seems to me that policymakers need to face up to, and decide whether or not to fix, the really big issues about how insolvency and resolution laws are applied to internationally active financial companies. BIS Review 33/2010  3  Broadly speaking, countries’ laws apply either territorial principles to international insolvencies, consistent with separate procedures for each of a bank’s entities in different jurisdictions (so-called “separate-entity resolution”); or universal principles, consistent with a single procedure applying to the resolution of an international bank and its branches abroad, wherever they are located (“single-entity resolution”). I believe that top-level policymakers have to choose what kind of regime they want. This issue needs to be elevated above the level of middle-ranking technocrats where, through no great fault of their own, it has wallowed for too long. The issues were articulated as long as 20 years ago, following BCCI’s failure. 2 Nothing much has been done globally. So in the second half of my remarks today, I just want to sketch why this problem arises.
According to the United Nation Office on Drugs and Crime (UNODC), that translated to 800 billion to 2 trillion US dollars in current GDP. UNODC acknowledged that the margin between those figures is huge but we will agree that even the lower estimate underlines the seriousness of the problem. Money laundering is directly linked with crimes as crimes are largely motivated by money. In Malaysia, for the period between 2011 and 2012 alone, total amount investigated for serious crimes by our law enforcement authorities stood at RM13.1 billion. This is the amount that has the potential to be laundered through our system. We recognize that the actual extent of money laundering is difficult to measure. Certain type of crime may not be even reported, let alone investigated. For example, in the case of corruption, if both the giver and taker are willing giver and willing taker, the case will not be reported unless there is report from third party. It also acknowledged by the international convention, that for every 10 crimes committed, only one will get reported. Crimes and money laundering jeopardized socio-economic development of the country Crimes and money laundering would jeopardize socio-economic development our country. Serious crimes such as drug trafficking, corruption, tax evasion are intrinsically damaging to the country as they can weaken the economy. Not taking sufficient enforcement measures on the proceeds of crimes will perpetuate more crimes in the country as the benefits from the proceeds would incentivize perpetration of more and bigger crimes.