Watercolour Illustration of a dripping tap

To many in the financial-services industry, and even more working for good causes in poor or war-torn countries, it has been the mother of all unintended consequences. The global financial crisis ushered in a severe regulatory crackdown on financial crime and the firms that enabled it. This was understandable: banks had grown careless about dirty money in the go-go years. But it led to a stampede away from customers in places or sectors deemed to pose a high risk of tax-dodging, money-laundering, the evasion of sanctions or the fin­ancing of terrorism. This “derisking”, now almost a decade old, has caused much indiscriminate pain, mostly in poor countries that can least bear it. There is, however, reason to hope that 2018 will be the year banks rediscover risk and start to relax their grip on the money-spigots, writes Matthew Valencia.

Their retreat has been driven by a combination of fear and prudence. The fear was of fines for abetting fin­ancial crime. These have soared. BNP Paribas was collared for almost $9bn for aiding sanctions-busters. Banks have also ditched clients they deem more marginal in response to tougher post-crisis capital and liquidity requirements, forced on them by nervous regulators seeking to avoid another meltdown.

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