Inconsistencies in regulations on cross-border payments create opportunities for fraud, money laundering, terrorist financing, and other illicit financial activities, according to the Financial Stability Board.
Details: The FSB released a final report containing recommendations for regulating and supervising bank and non-bank payment service providers offering cross-border payment services. The report noted that banks are generally subject to stricter regulation than non-banks, which limits their ability to innovate in the cross-border payments space.
ICBA Input: ICBA responded to the FSB’s original request for comment and expressed concerns with the way the first report portrayed banks as obstacles to non-bank providers. In response, the FSB acknowledged the innovation delivered by banks and clarified the impact of regulatory gaps.
More: A Treasury Department official recently said that if a poorly designed cross-border payments system were widely adopted, it could do significant harm to international financial stability and economic security.