'Diplomats' bank' is fined £13.6m

RIGGS, the Washington DC-based 'diplomats' bank', has been fined $25m (£13.6m) for failing to protect against money-laundering.

Long-time chief executive Joe Allbritton, seared by the scandal, says he will not seek re-election.

The Office of the Comptroller of the Currency accused the bank of failing to investigate suspicious activity or collect enough information about some of its foreign customers.

The regulator found 'a number of problems' with the bank's handling of accounts with foreign governments, including Saudi Arabia and Equatorial Guinea.

Riggs has made a major business out of catering to the legions of overseas diplomats and emissaries in Washington but is now pulling out of international banking.

The regulator said the bank failed to monitor and report suspicious transactions involving tens of millions of dollars.

Under anti-money laundering laws, banks are required to record large transactions and report suspicious activity by their clients. Many in the US believe that Saudi Arabian interests were heavily involved in financing Osama bin Laden.

Prince Bandar bin Sultan, the Saudi ambassador to the US, said last month that his embassy no longer had a relationship with Riggs.