EBA’s Opinion on de-risking: ineffective money laundering and terrorist financing risks lead to unwarranted financial exclusion

The European Banking Authority (EBA) has published its Opinion on the scale and impact of de-risking in the EU and the steps competent authorities can take to tackle unwarranted de-risking.

De-risking refers to decisions taken by financial institutions not to provide financial services to customers in certain risk categories. De-risking, while being a legitimate risk management tool, can also be a sign of ineffective money laundering (ML) and terrorist financing (TF) risk management, with at times severe consequences.

Following an investigation into why institutions decide to de-risk particular categories of customers instead of managing risks associated with them, the EBA’s Opinion suggests that unwarranted de-risking affe