Banks: shadow recycling on large institutions, a 2 trillion dollar scandal

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21 September 2020

Field day for banks with substantial discounts for all the big European companies in the sector.

The Euro Stoxx Banks even marks a decline of over 6%, slipping to the lowest since March.

Since the beginning of the year, the balance for the banking sector is over -43%.

Triggering the violent sales on bank stocks is the new investigation by the International Consortium of Investigative Journalists (ICIJ) which speaks of more than 2,100 reports of suspicious activity which between 1999 and 2017 led to the identification of approximately 2,000 billion dollars in transactions marked as possible money laundering or other criminal activity.

At the top of the list are the German Deutsche Bank AG with 1.3 trillion dollars in suspicious money, followed by the US giant JP Morgan with over half a billion dollars.

ICIJ's analysis remarks how other large global banks have continued to profit from "powerful and dangerous actors" over the past two decades, even after the US imposed harsh sanctions.

These include HSBC Holdings Plc, Standard Chartered and Bank of New York Mellon.

The investigation triggered sales on major banking stocks.

In Frankfurt, the Deutsche Bank stock fell by over 8%.

The German institute, in response to the report, said ICIJ raised "a number of historical issues" and those relating to the bank are "well known" to regulators.

On Wall Street, JP Morgan shares fell 4% in the pre-market.

In Piazza Affari all the big banks are struggling even if no tricolor bank is mentioned in the investigation.

Unicredit has come to sell about 6% with a short suspension to the downside.

Over -5% for Intesa Sanpaolo dropped to € 1.622.

Ing Groep in Amsterdam even reached -10.83%.

The rumors of the Polish newspaper Gazeta Wyborcza weigh heavily on ING Groep about hundreds of millions of dollars of Russian and Ukrainian money laundered through Ing Bank Slaski SA and transferred to tax havens such as Cyprus at least until 2016. Some ING employees cited in the document were former Deutsche Bank employees.

Ing less than two years ago she was fined $ 900 million for money laundering.

In Hong Kong, the HSBC stock slipped to its lowest level since 1995, bringing its year-to-date balance to over -50%.

The largest European bank for balance sheet assets and market capitalization had already been involved in money laundering activities and at the end of 2011 I paid a record fine of $ 1.92 billion to the US authorities.

The bank told the Financial Times that all information contained in the US Treasury's Financial Crimes Enforcement Network (FinCEN) documents predates the agreement with the US authorities.

To weigh on HSBC, however, there is above all the risk that the Chinese government is preparing to include the bank in its list of "unreliable entities";

this would expose HSBC to sanctions up to and including a ban on investing in China and a ban on its staff from entering the country, the Chinese newspaper Global Times reported on Saturday.

What angered Beijing was the bank's participation in the US investigation into Huawei.