Law, Tax, Compliance
Rethinking AML effectiveness: insights from the ILCC financial services debate
Published on 11 February 2026
More than 100 professionals from the banking, financial and regulatory sectors gathered at Banque de Luxembourg for a high-level debate organised by the Ireland Luxembourg Chamber of Commerce (ILCC). The event, titled “The Burden of Compliance and the Effectiveness and Unintended Consequences of AML – The Way Forward”, examined a key question: Are current AML/CFT and KYC frameworks delivering the intended results — and at what cost? Among the panel speakers was Jerry Grbic, CEO of the Luxembourg Bankers’ Association (ABBL).
Summary
A system under pressure
Speakers acknowledged the seriousness of money laundering and terrorism financing. These crimes are linked to fraud, drug trafficking, human exploitation and corruption. Public action is essential.
However, concerns were raised about proportionality and effectiveness.
Figures discussed during the event highlighted that:
- Global compliance costs exceed USD 180 billion per year
- Less than 1% of illicit financial flows are estimated to be recovered worldwide
This gap has fuelled debate about whether the current regulatory model achieves the desired outcomes.
Participants also discussed unintended consequences, including:
- “De-risking” and exclusion of certain customers
- Difficulties for SMEs and entrepreneurs in accessing financial services
- Operational burdens for financial institutions
- Constraints on innovation
Jerry Grbic: from more regulation to smarter regulation
In his intervention, Jerry Grbic made it clear that the debate is not about deregulation.
Instead, he called for a more intelligent approach.
“We do not need more regulation. We need to understand what is required to have an impact and to produce positive outcomes.”
He recalled that the regulatory tightening following the 2008–2009 financial crisis strengthened the stability of the financial system. Stability, he underlined, is essential to trust.
“If you do not trust your bank, you do not put your money there. We need stability to create trust, and to create trust, we need a good reputation.”
Jerry Grbic also pointed to Luxembourg’s experience. Since the end of banking secrecy in 2015, assets under management have tripled — demonstrating that transparency and robust standards can reinforce, rather than weaken, a financial centre.
At the same time, he acknowledged practical challenges linked to the risk-based approach and increasing compliance requirements, especially in a cross-border environment like Luxembourg.
We do not need more regulation. We need to understand what is required to have an impact and to produce positive outcomes.
Jerry Grbic
CEO, ABBL
A call for better alignment
A central theme of the debate was the need for better alignment between:
- Public authorities seeking to combat financial crime
- Financial institutions seeking trust, stability and legal certainty
Speakers called for:
- More outcome-focused evaluation of AML/CFT frameworks
- Greater transparency regarding effectiveness
- Improved cooperation and data-sharing mechanisms
- Reduced negative externalities while maintaining strong safeguards
Continuing the dialogue
The ABBL welcomes continued dialogue on these issues.
Ensuring the integrity of the financial system remains a priority. At the same time, regulation must be effective, proportionate and supportive of financial inclusion, innovation and competitiveness.
The ILCC event provided a valuable platform to reflect on how AML/CFT frameworks can evolve to meet these objectives.
Amandine Laurent
Legal Adviser, ABBL
Published on 11 February 2026