Shuttle Banks

I have dealt with banks as an employee and as a client since 1981. During that time, I had good and bad days, ups and downs, crises and bankruptcies, and I recall them and their people and incidents as if I were watching an old movie through my eyes. I write down the events without any censorship because they are personal diaries, so that I do not forget and waste their events in the mist of life. In order to stay away from the National Assembly and the government news, let me tell you this story about the scandals of international banks, and compare them with our banks and our distinguished banking system in order to thank Allah that we have superiority over the western countries. Central banks in the developed world have showered us with controls and policies, managing risk and tracking money launderers, terrorist financing, and drugs. Despite all of these safeguards, one has to wonder how well-established banks can find themselves in legal trouble for such serious violations! The latest of these scandals is what happened and is happening now with the second largest bank in Switzerland, which lost more than 55% of its market value in a "free fall," as it is said, and is still reeling. This bank has tried with all its media ability to show that its problems lie in the investment department and that its banking base and the private services sector are solid and far from these scandals. But what the newspapers surprised us about a few days ago is that this bank settled with the French judiciary in the amount of approximately $238 million as a result of opening accounts for French clients that it met in cafes and luxury hotels away from the banking system and local law, which helped these 5,000 clients commit the crime of opening accounts for the purpose of tax evasion. Of course, what they did in France has been done in other countries as well, and they will receive new blows soon. Their new chief manager asked shareholders to give him a period of 100 days to present his plan to save this bank. He may rely on sovereign funds in some Gulf countries.

Well, this story brings us to two important topics:

The first is: what is the extent of the exposure of the State of Kuwait and its institutions that trade in international markets through this bank, whether as deposits or investments? What are the precautionary measures taken by these institutions? No one can say that this is a veteran bank, and it will not fail, as it was preceded by the American "Lehman Brothers" bank, which disappeared bankrupted overnight. In 2008, Citibank was not in the best condition at that time, as the value of the stock dropped from $70 to nearly a dollar, and had it not been for the political pressure from the US administration and the entry of large investments from the Gulf countries to float this bank, it would now be lost. The point here is that caution is a duty, and the Shami (Syrian area) proverb says, "Don’t sleep in the cemetery, and complain of nightmares." The global banking sector is teeming with reputable banks. The second topic is the issue of the activity of international bank representatives, especially those working in private banking services, which are directed at owners of large sums of money, whether individuals or institutions. These bankers enter the country easily because they are Europeans or Americans, and they do not even need a visa. They carry out all kinds of banking transactions without licenses from the state, as if they were, as it is said, "shuttle traders". They were previously banned from conducting any banking business in Kuwait. But they are still working, and all they are doing now is circumventing instructions. They do not hand in any information or reports, but rather complicate deals, and then send you papers to sign via e-mail or mail. The question that arises here is: Can any Kuwaiti go to Switzerland or America and do the same activity? The answer is "Definitely no." He will be imprisoned, and cases will be brought against the banks he represents, just as the French did to this bank. So why are we "weak"? Any bank that wants to operate in Kuwait is welcome, but according to the laws of the country. What prevents them from opening representative offices or branches, or at least allying with a Kuwaiti bank? The reality is that it is more convenient for them to send a representative whose only asset will be his bag, stay for two days in a hotel, make deals worth millions, and return to their country. I hope that the government and the National Assembly issue a law that allows the state to sue these banks if any of their employees violate the state’s laws. If anyone wants to know more about the bank I am talking about, they have to search on Google and type in "Swiss bank scandals."

Stay Safe.