22 Feb 2010

Fraud Prevention - Banks walk on thin Ice

News that a subsidiary of Nord LB (Norddeutsche Landesbank) in Switzerland may have fallen victim to a fraud in its trade finance activities that may cost it up to Euro 130 million is a timely reminder that banking is a hazardous business where a premium should be put on credit and operational supervision and due diligence. All-too-often senior management is preoccupied with 'strategy' or political infighting and pays little or no attention to what is going on further down in the organisation or in outposts of a far-flung (overextended?) empire.

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