Overview

An association of banks from Northern Europe sought to enhance its reputation and to correct misperceptions within the US about its country's financial services sector. It also sought to improve its technical capacity for financial monitoring in order to expand its relationships with international financial institutions. The country's emergence as a regional financial hub made it vital to pursue proactive efforts to secure its international financial standing.

Challenges

As one of the country's leading banks sought a loan guarantee from the US Export-Import Bank, Blue Star Strategies, though its communication with the US Department of Treasury and other key regulatory agencies, uncovered a broader issue. Specifically, the inadequate monitoring of the transactions of some of the bank's eastern neighbors was posing a threat to the country's banking sector as a whole by jeopardizing its status as a secure international banking hub. Two main challenges stood in the way of remedying the situation: first, the lack of robust relationships and engagements between the country's public and private institutions and their counterparts in Washington; and second, Washington's lack of knowledge and support of the country's progress - political, economic, and financial - since its independence from the USSR.

Strategic Recommendations

Blue Star developed an engagement strategy to strengthen the bilateral working relationship between the country's banking industry and decision makers in Washington, including Congress, the executive branch, international financial institutions, and the private sector. This strategy centered on the implementation of state-of-the-art financial monitoring and compliance standards - including anti-money laundering and counter-terrorism financing (AML-CTF) protocols - in partnership with these Washington decision makers. The end goal of the strategy was the construction of a completely robust, transparent banking industry with the recognition and cooperation of US officials and the US financial system.

Program Elements

Blue Star's program led to long term partnerships with key international financial institutions, US banking associations, and Federal leadership in Washington. Based on these partnerships, Blue Star facilitated substantive engagements between the country's banking industry and financial regulators and their US counterparts in order to strengthen AML/CTF procedures. These partnerships between groups such as the American Bankers Association, major banks such as HSBC and JP Morgan, and the US Treasury Department were developed through a series of working sessions, seminars, conferences, and private meetings, where stakeholders gathered to discuss policy issues, resolve regulatory concerns, and enhance mutual understanding of financial best practices.

Results

Blue Star's strategy was successful in changing the reputation of the country's banking sector. The substantive programmatic aspects of the strengthened bilateral relationship remain in force, and the network of public and private stakeholders has been sustained. Blue Star was also able to response to new challenges as they arose, including anticipating inaccurate language in draft legislation and proactively working with Congressional leadership to develop alternative language that would not falsely label the country problematic to the global financial system.