The U.S. Treasury Department’s adoption of artificial intelligence (AI) to combat financial crime has led to a massive leap in fraud detection. The treasury managed to recover $1 billion in check fraud in fiscal 2024 alone, nearly three times what it recovered the previous year. Treasury officials credited machine learning AI for the success, which also helped detect and prevent more than $4 billion in fraud overall during the year—a six-fold increase from the prior fiscal year. Renata Miskell, a senior Treasury official, called the impact of AI “transformative,” noting that it has increased their ability to detect and prevent fraud by uncovering hidden patterns and anomalies within vast amounts of data. Treasury officials began using AI to target financial crime in late 2022, following practices already in place by many banks and credit card companies. Unlike generative AI models like ChatGPT, which generate text and images, the Treasury’s fraud detection relies on machine learning, a branch of AI that excels at analyzing data and identifying suspicious activity much faster than humans could. This is crucial for an agency responsible for handling $7 trillion in payments annually, including Social Security, tax refunds, and federal paychecks. With the rise in fraud, particularly during the COVID-19 pandemic, AI has become essential in protecting taxpayer dollars from scammers. The treasury’s efforts come amid growing concerns about AI-related risks in finance. Secretary Janet Yellen and other officials warned that AI could also be exploited by bad actors, posing new dangers to the financial system. However, Miskell clarified that a human always reviews flagged transactions before determining if they constitute fraud, ensuring AI improves fraud detection without replacing human oversight. Miskell added the feds continue to expand use of AI and is working with state agencies to upgrade fraud detection tools, particularly to combat issues like unemployment insurance fraud. The Treasury is not alone in its adoption of AI for financial oversight. In September 2023, the Internal Revenue Service (IRS) announced its own use of AI to identify tax evasion schemes, particularly within hedge funds and law firms.

The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for August 2024.  The next release, which will report on data for September 2024, is scheduled for November 18, 2024.  The sum total in August of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a net TIC inflow of $79.2 billion.  Of this, net foreign private inflows were $79.7 billion, and net foreign official outflows were $0.6 billion. Foreign residents increased their holdings of long-term U.S. securities in August; their net purchases were $129.8 billion.  Net purchases by private foreign investors were $158.1 billion, while net sales by foreign official institutions were $28.3 billion. U.S. residents increased their holdings of long-term foreign securities, with net purchases of $18.4 billion. After including adjustments, such as estimated foreign portfolio acquisitions of U.S. stocks through stock swaps, overall net foreign purchases of long-term securities are estimated to have been $111.4 billion in August. Foreign residents increased their holdings of U.S. Treasury bills by $59.4 billion.  Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities increased by $65.7 billion. Banks’ own net dollar-denominated liabilities to foreign residents decreased by $97.9 billion. Complete data are available on the Treasury website at: https://home.treasury.gov/data/treasury-international-capital-tic-system About TIC Data The monthly data on holdings of long-term securities, as well as the monthly table on Major Foreign Holders of Treasury Securities, reflect foreign holdings of U.S. securities collected primarily on the basis of custodial data.  These data help provide a window into foreign ownership of U.S. securities, but they cannot attribute holdings of U.S. securities with complete accuracy.  For example, if a U.S. Treasury security purchased by a foreign resident is held in a custodial account in a third country, the true ownership of the security will not be reflected in the data.  The custodial data will also not properly attribute U.S. Treasury securities managed by foreign private portfolio managers who invest on behalf of residents of other countries.  In addition, foreign countries may hold dollars and other U.S. assets that are not captured in the TIC data.  For these reasons, it is difficult to draw precise conclusions from TIC data about changes in the foreign holdings of U.S. financial assets by individual countries. Press Notice TIC for October 2024       TIC Monthly Reports on Cross-Border Financial Flows       (Billions of dollars, not seasonally adjusted)                 12 Months Through                     2022 2023 Aug-23 Aug-24 May Jun Jul Aug     Foreigners' Acquisitions of Long-Term Securities                                             1     Gross U.S. Sales of Domestic U.S. Securities 61438.4 52158.7 52555.5 59039.3 5265.2 5178.8 5514.7 5962.2 2     Gross U.S. Purchases of Domestic U.S. Securities 60443.7 51155.0 51314.4 58246.3 5270.1 5062.4 5377.3 5832.4 3     Domestic Securities, net U.S. sales (line 1 less line 2) /1 994.7 1003.7 1241.1 793.0 -4.9 116.4 137.5 129.8                             4       Private, net /2 1005.5 858.6 1118.9 758.0 -5.9 104.7 164.8 158.1 5         Treasury Bonds & Notes, net 927.3 467.3 602.0 506.4 50.5 18.1 88.1 49.3 6         Gov't Agency Bonds, net 141.5 120.9 129.6 97.0 -9.8 10.6 9.2 9.9 7         Corporate Bonds, net 147.3 277.7 255.1 288.4 8.0 16.6 31.2 39.8 8         Equities, net -210.6 -7.4 132.2 -133.8 -54.5 59.5 36.3 59.2                             9       Official, net /3 -10.8 145.1 122.2 35.0 1.0 11.6 -27.4 -28.3 10         Treasury Bonds & Notes, net -173.3 53.5 -10.9 4.5 -6.0 -6.4 -32.2 -30.2 11         Gov't Agency Bonds, net 162.1 40.1 70.2 -39.8 -3.7 -3.5 -5.0 -5.7 12         Corporate Bonds, net 16.6 23.1 14.3 35.2 5.8 1.2 2.4 1.9 13         Equities, net -16.2 28.5 48.5 35.1 4.9 20.4 7.4 5.6                             14     Gross U.S. Sales of Foreign Securities 26835.5 13833.0 18813.4 15972.5 1539.4 1526.2 1601.2 1532.7 15     Gross U.S. Purchases of Foreign Securities 26509.0 13904.8 18792.4 16282.3 1577.3 1562.1 1600.8 1551.1 16     Foreign Securities, net U.S. sales (line 14 less line 15) /4 326.5 -71.8 21.0 -309.8 -37.9 -35.8 0.4 -18.4 17         Foreign Bonds, net 281.6 -82.5 17.8 -220.5 -23.1 -29.0 4.3 -4.6 18         Foreign Equities, net 44.9 10.7 3.2 -89.3 -14.8 -6.8 -3.8 -13.9                             19     Net Long-Term Securities Transactions (lines 3 and 16): 1321.2 931.9 1262.2 483.2 -42.8 80.5 137.9 111.4                             20     Other Acquisitions of Long-Term Securities, net /5 -151.1 -9.4 -55.8 0.0 0.0 0.0 0.0 0.0                             21   Net Foreign Acquisition of Long-Term Securities                           (lines 19 and 20): 1170.1 922.6 1206.4 483.2 -42.8 80.5 137.9 111.4                             22   Increase in Foreign Holdings of Dollar-Denominated Short-Term                           U.S. Securities and Other Custody Liabilities: /6 194.3 -104.3 10.3 -40.9 4.7 -38.9 14.3 65.7 23     U.S. Treasury Bills -37.4 132.7 107.2 113.7 -9.8 6.2 16.2 59.4 24       Private, net -28.5 121.4 99.9 44.5 -1.9 -7.3 12.8 24.1 25       Official, net -8.9 11.3 7.3 69.1 -7.9 13.4 3.3 35.3 26     Other Negotiable Instruments                           and Selected Other Liabilities: /7 231.7 -237.0 -96.9 -154.6 14.5 -45.0 -1.8 6.3 27       Private, net 231.0 -220.6 -82.6 -146.2 11.3 -42.3 -5.1 8.7 28       Official, net 0.6 -16.4 -14.2 -8.4 3.2 -2.7 3.3 -2.4                             29   Change in Banks' Own Net Dollar-Denominated Liabilities 258.5 -50.0 -138.8 -10.8 65.4 50.2 6.9 -97.9                             30 Monthly Net Dollar-Denominated Portfolio Inflows (lines 21, 22, and 29) /8 /9 1622.8 768.3 1077.9 431.5 27.3 91.9 159.1 79.2     of  which                   31     Private, net 1596.9 584.9 921.9 216.3 18.8 65.6 144.5 79.7 32     Official, net 25.9 183.4 155.9 215.2 8.6 26.3 14.6 -0.6                                                         /1     Net U.S. sales = Net foreign purchases of U.S. securities (+).                 /2     Includes international and regional organizations.                 /3     The reported division of net U.S. sales of long-term securities between net sales to foreign official institutions and net sales               to other foreign investors is subject to a "transaction bias" described in Frequently Asked Questions 7 and 10.a.4 on the TIC website.   /4     Net transactions in foreign securities by U.S. residents. Foreign purchases of foreign securities = U.S. sales of foreign securities to foreigners.           Thus negative entries indicate net U.S. purchases of foreign securities, or an outflow of capital from the United States; positive entries           indicate net U.S. sales of foreign securities.                 /5     Minus estimated unrecorded principal repayments to foreigners on domestic corporate and agency asset-backed securities (zero after Jan. 2023) +          estimated foreign acquisitions of U.S. equity through stock swaps - estimated U.S. acquisitions of foreign equity through stock swaps +           increase in nonmarketable Treasury Bonds and Notes Issued to Official Institutions and Other Residents of Foreign Countries.      /6     These are primarily data on monthly changes in banks' and broker/dealers' custody liabilities. Data on custody claims are collected             quarterly and published in the TIC website.                 /7     "Selected Other Liabilities" are primarily the foreign liabilities of U.S. customers that are managed by U.S. banks or broker/dealers.     /8     TIC data cover most components of international financial flows, but do not include data on direct investment flows, which are collected           and published by the Department of Commerce's Bureau of Economic Analysis. In addition to the monthly data summarized here, the           TIC collects quarterly data on some banking and nonbanking assets and liabilities. Frequently Asked Question 1 on the TIC website           describes the scope of TIC data collection.                 9/      Series break at February 2023 for lines 1-21 and the dependent lines 30-32; see TIC press releases of March 15 and April 15, 2023.

The closure of the Vienna-based European American Investment Bank AG (EURAM) has sent shockwaves through the financial world in Vienna. The Financial Market Authority (FMA) has intervened, halting the bank’s operations entirely due to severe deficiencies. With deposits totaling €276.3 million, the fallout from this move is significant, leaving hundreds of clients in uncertainty about their funds. The EURAM Bank has long been under scrutiny, particularly for its failure to comply with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations. Established in 1999, EURAM built its reputation through its dealings with foreign clients, often engaging in international transactions. However, repeated failures in AML compliance, identified as early as 2022, placed the bank squarely on the regulatory radar. A follow-up review in October 2023 showed no improvements, triggering the FMA’s decisive action to suspend the bank’s business activities. One of the major red flags highlighted was EURAM’s loan portfolio, which had been marked by significant write-downs, pointing to high-risk lending practices over the past years. These internal financial issues only exacerbated the problems related to compliance with legal standards. Despite the FMA’s escalating concerns, EURAM repeatedly refuted the allegations. The situation became untenable by early 2023 when the FMA barred the bank from conducting new business and installed a government administrator in August to oversee operations. Ultimately, the bank’s failures were deemed too severe to rectify. For EURAM’s 757 clients, the collapse of the bank has triggered fears over their savings. While the majority of the bank’s clientele—often high-net-worth individuals—held substantial deposits, only €37.6 million of the total €276.3 million is secured through Austria’s deposit guarantee scheme. Fortunately, for deposits up to €100,000, the Austrian deposit protection entity, Einlagensicherung Austria (ESA), has assured customers that compensation will be processed within seven working days. ESA has promised swift action to reimburse affected clients. Stefan Tacke, ESA’s managing director, assured that the process will be handled online for maximum efficiency. He also noted that ESA is closely cooperating with the Austrian Financial Intelligence Unit (A-FIU), reflecting the gravity of the AML deficiencies uncovered at EURAM. Share Information with FinTelegram CategoriestickerTagsEURAMEuropean Amercian Investment Bank