Saturday, July 01, 2006

IMF says terror finance oversight varies greatly

IMF says terror finance oversight varies greatly

WASHINGTON (Reuters) - The International Monetary Fund on Friday encouraged countries to improve monitoring of suspected terror financing and money laundering after an IMF report found significant differences in the quality of supervision.

The report showed the quality and consistency of national and regional banking supervisors' monitoring of such activities varied greatly, the fund said.

IMF executive directors "encouraged all assessor bodies to strengthen internal review procedures."

The IMF said a large majority of reports were of high or medium quality and IMF directors asked staff to keep providing technical assistance to banking supervisors to help improve their capacity to produce quality assessments.

"Directors expressed concern over the poorer quality of reports prepared by some other assessor bodies and the variability in quality across reports generally," it added.

Most directors agreed that reports by assessor agencies of IMF member countries should be reviewed in five years.

The report comes about a week after the U.S. Treasury acknowledged a secret program to uncover terror activity by tracking financial records of a Brussels-based consortium, the Society for Worldwide Interbank Financial Telecommunications, or SWIFT, a messaging system which is owned or controlled by nearly 8,000 commercial banks in 20 countries.

The Washington-based multilateral lender, which has 184 member countries, said it endorsed efforts to improve the quality and consistency of reports by all monitoring agencies.

The world's top financial regulator and standard setter, the Basel Committee on Banking Supervision, issued proposals in April to strengthen its global scorecard for banking supervisors, emphasizing the fight against terror finance.

It sought public comment before issuing a final version of those principles which would be used by the IMF and World Bank to rate the effectiveness of national banking supervisors.