The package of anti-money laundering measures has been seen partly as a bid to counter allegations that banks are not doing enough to prevent dirty money entering the global financial system. The banks party to the new code are ABN AMRO, Banco Santander, Barclays, Citigroup, Chase Manhattan, Credit Suisse Group, Deutsche Bank, HSBC Holdings, JP Morgan, Societe Generale and UBS. Other banks are being encouraged to join in. Hans-Peter Bauer, chief risk officer of UBS, said: 'This should be seen as a clear recognition by the private commercial banks of their responsibility in the fight against serious international crime.'

In practice,the new principles are intended to help banks secure the accurate identity of individuals opening private bank accounts. It is often the case that individuals seek anonymity for themselves by using third parties to represent them on opening accounts and the guidelines state clearly: 'Beneficial ownership must be established for all accounts.'

The chairman of Transparency International, Peter Eigen, said that his organisation had served as a catalyst for the leading banks to work together to try to make it harder for the less-than-scrupulous to deposit their ill-gotten gains in the world’s banking system. He said: 'We have provided expert advice throughout a process that now commits the senior managements of the participating banks to the enforcement of the principles that are being published.'

The principles deal with various aspects of "know your customer" policies with regards to wealthy individuals and the private banking departments of financial institutions. They also deal with the identification and follow-up of unusual or suspicious activities. Under the new code, the banks would only accept those clients who could reasonably show the source of their wealth was legitimate and whose identity could be clearly established. In the case of intermediaries, banks would have to establish who ultimately owns the funds. The guidelines state: 'The bank will apply heightened scrutiny to clients and beneficial owners resident in and funds from countries identified by credible sources as having inadequate anti money-laundering standards or representing high-risk for crime and corruption.'

Mark Pieth, a Swiss money laundering expert and chair of the OECD's Working Group on Bribery, advised both the banks and TI during their talks. He said that this was the first time that a raft of banks had agreed to come together to fine-tune the "know your customer" rules and that the initiative, which was "highly significant" in the OECD's work against corruption, filled a hole left by government regulators: 'It helps to make it far more difficult to create slush funds for bribery or to hide corruption money in the regulated banking sector, since the level of awareness is raised substantially, and in an internationally standardised way,' he said.

The banks, however, have reacted cautiously to the suggestion of enforced regulation. Reinout van Lennep, head of ABN Amro private banking, commented: 'These principles reflect decent and adequate standards; we neither expect nor wish to see the standards being raised higher.'