Israel Discount Bank has quietly disclosed that its total compliance costs for the period 2005-2007 could be as high as US$46m. This estimate, buried in its Third Quarter 2007 Financial Statement, shows the true cost of state and Federal regulatory actions brought against the bank in New York for alleged anti-money laundering deficiencies. Often, the costs of implementation of AML programmes required by regulators exceeds the actual fines and penalties imposed against the bank. Whilst financial institutions prefer not to broadcast the details of these costs, as they may reveal the true depth of the AML deficiencies found by regulators, they generally show up in obscure filings, and are often spotted by banking analysts.

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