O'Neill's gaff raises questions over his fitness for purpose

US Treasury Secretary Paul O'Neill is the minister in charge of the US Treasury which guides all US counter-money laundering efforts. FinCEN is a Treasury agency. US Customs is a treasury agency. Both sent their people all over the world to tell countries how to give effect to counter-money laundering regimes on the American Model. He is therefore directly and personally responsible for US counter-money laundering policy and practice.

It is therefore reasonable to suggest that he might have some idea about the prevention of money laundering and how it is applied in financial institutions that his own departments have a regulatory function over.

More, his departments drive the actions of the FATF, the OECD and the Financial Stability Forum as well as the G7,8,20 and others.

So, his suitability for such is seriously compromised by his remarks in Pakistan yesterday. He said "let me show you a book; I think this may be the first copy. This is a book called "Anti-Money-Laundering Measures: A Guide for Bankers," and it's published by the Institute of Bankers in Pakistan. You know, it's the first one that I have seen here in Pakistan. I have to tell you, it's the first one I've seen around the world. So I think maybe Pakistan is leading the world in talking internally to its own institutions about the importance of finding and confiscating tainted money."

Is the man blind, stupid or ignorant? Books of this sort are produced by almost every regulator around the world. Even in the USA they have them. Trade bodies have them.

The extent of his ignorance extends to patronising the Central Bank of Pakistan: "And I was really quite taken with the fact that the Central Bank Governor was able to give me this booklet and then talked in some depth this morning about the efforts that are being made."

Just because regulation and central bank functions are separated in the USA, and therefore the Director of the Fed might not know about money laundering because it is outside his remit, the failure to recognise that regulation and central bank functions are composite in most of the developed world is simply ridiculous.

If O'Neill was a car, he would be rejected as a lemon.