ANZ's link to the controversy surrounding Malaysia's state investment fund 1MDB may warrant a more detailed report, following regulatory action this week against the Swiss private bank BSI, which acted as banker to 1MDB and related parties.The Monetary Authority of Singapore has ordered BSI to shut its local branch, in response to a widely reported money laundering scandal involving 1MDB's clients, including Malaysian Prime Minister Najib Razak.At the same time, Switzerland's Financial Market Supervisory Authority FINMA declared that BSI was "in breach of money laundering regulations."ANZ holds just under 25 per cent of the shares of Malaysian bank AmBank, which had billions of dollars invested with 1MDB. AmBank has previously been fined for beaching its anti-money laundering obligations.FINMA said: "In its proceedings against BSI, FINMA found serious shortcomings in the bank's anti-money laundering processes resulting from inadequate risk management and the failure of the internal control system." FINMA found that "in the period from 2011 to April 2015, there were serious shortcomings in identifying transactions involving increased risk. These failures related in particular to business relationships with politically exposed persons, the origin of whose assets was not sufficiently clarified, and whose dubious transactions involving hundreds of millions of US dollars were not satisfactorily scrutinised. "The bank repeatedly, systematically and for an extended period breached its obligation to establish the necessary documentation for transactions with increased risks."Sovereign wealth funds were "BSI's largest and most profitable client group," FINMA said, a fact "reflected in the remuneration paid to the bank employees involved."It said: "Fees charged were above average and out of line with normal market rates."In the context of the 1MDB case, the bank failed to adequately monitor relationships with a client group with around 100 accounts at the bank. "Transactions were executed within the client group and with third parties without the bank adequately clarifying their commercial justification."In one case involving a deposit of US$20 million, for example, the bank was happy to accept the client's explanation that the funds involved were a 'gift'."In another case, an account was credited with more than US$98 million without any effort to clarify its commercial background."The bank executed transactions involving similar amounts even though in some cases the explanations and contractual documents obtained contradicted the purpose of the account as stated when it was opened."Transactions were often generically justified on the basis of loan agreements, although the agreements provided no sufficient explanation of the real background to the transaction in question."FINMA added that "in many cases there were clear indications of pass-through transactions. "In one case, US$20 million were routed through a variety of accounts within the bank on the same day before eventually being transferred to another bank. "Transactions of this kind are often a clear indication of money laundering," it said."The bank failed to properly document or carry out plausibility checks on these transactions or was happy to accept the explanation that the beneficial owner of all the accounts was the same person or that the transactions were being executed for 'accounting purposes'."FINMA