In brief: Treasury proposes ‘know your customer’ rules for banks

WASHINGTON – The U.S. government is proposing new rules for banks and other financial firms aimed at preventing the use of anonymous companies to launder illicit profits.

The Treasury Department opened the proposal Wednesday to public comment for 60 days. The so-called “Know your customer” rules would add a requirement that financial firms know and verify the identities of the people who control companies, known as beneficial owners.

Under current rules financial firms are required to report suspicious transactions to authorities in order to prevent the financial system from being used to launder proceeds from illegal activities or for financing terrorism.

Treasury said the new proposal is in line with principles adopted by the eight major industrial countries to fight tax evasion, bribery and money laundering.

The new rules would make the financial system more transparent, Treasury said in a news release.

The rules apply to banks, brokerage firms, mutual funds and brokers who trade commodities.

Argentina teetering on default as talks end

NEW YORK – Talks aimed at averting Argentina’s second default in 13 years ended with bitter recriminations Wednesday as the South American country said it could not accept a deal with U.S. hedge fund creditors it dismisses as “vultures.”

Argentine Economy Minister Axel Kicillof emerged from a meeting with creditors and a court-appointed mediator with an air of defiance, saying his government could find no middle ground ahead of a midnight deadline that automatically triggers a default on $539 million in interest payments.

Kicillof said the U.S. hedge funds demanding a $1.5 billion payment on outstanding Argentine bonds had refused a compromise offer as well as requests to agree to a stay of a judge’s order that would have allowed the interest payments to be made on time and avert what is likely to create great economic uncertainty for investors and citizens of Argentina.

Court-appointed mediator Daniel Pollack said the failure of the talks triggers an immediate default that, among other things, will hurt bondholders who were not part of the dispute as well as the Argentine economy.