Why banks should not be responsible for KYC and anti-money-laundering
Preventing criminals from opening bank accounts and laundering money is obviously a highly desirable goal. The first line of defense in pursuing this goal today lies with banks – known as KYC (Know Your Customer, the verification of identity) and AML (Anti-Money-Laundering checks). This is because governments have conveniently outsourced this task to banks, dangling gigantic fines above them as an incentive. For several reasons, however, this is a mistake. Here is why.
This is a guest post by our good friend Tobias Baer. We hope that you will enjoy it!