(Bloomberg) -- Switzerland’s top financial regulator warned the risk of money-laundering has risen in Switzerland in recent years as the watchdog said it’s preparing to penalize six Swiss banks over their ties to alleged corruption in Malaysia and Brazil.
Widening corruption scandals at 1Malaysia Development Bhd and Brazilian oil producer Petroleo Brasileiro SA have prompted the regulator to look at more than 20 Swiss banks and their potential ties to the affairs, Finma Chief Executive Officer Mark Branson said Tuesday.
“We’ve made clear over recent years and months that we see money laundering risk as having risen in our country,” the 47-year-old Branson said on a conference call. “We don’t think that’s endemic but we do think it’s a risk which has increased over time and here is a case that’s a particularly bad example.”
Branson was speaking in the wake of the closure of Lugano-based BSI SA’s Singapore unit after the Swiss regulator found the bank was in serious breach of money-laundering rules.
Prosecutors in Switzerland, Luxembourg, the U.S., Malaysia and Singapore have been investigating at least $4.2 billion of irregular transactions by the state fund, and recommended the advisory board headed by Prime Minister Najib Razak be disbanded. Razak has denied any wrongdoing.
Branson said Switzerland is not alone in facing this problem and BSI is a good example of the global reach of these kinds of scandals.
“Here you have banks involved with headquarters in the U.K., in the U.S., in the Middle East and in Switzerland,” said Branson, a Briton who worked at Credit Suisse Group AG and UBS Group AG before joining Finma.
“You have transactions that have run chiefly over Singapore, partly over Switzerland and also other financial centers,” he said. “You have multiple continents, you have banks based in multiple jurisdictions, so this is an issue for the financial industry worldwide.”
BSI is being acquired and integrated by Swiss rival EFG International AG, a deal approved by Finma on Tuesday.
(Corrects misspelled word in deck headline.)
To contact the reporters on this story: Hugo Miller in Geneva at email@example.com, Giles Broom in Geneva at firstname.lastname@example.org. To contact the editors responsible for this story: Anthony Aarons at email@example.com, Albertina Torsoli
©2016 Bloomberg L.P.