To help keep money laundering out of private banks, the Federal Reserve Board is expected to propose formal "know-your-customer" regulations this spring, for the first time. And private bankers say the central bank's guidance could not come soon enough.

"Right now there is no know-your-customer regulation, but we're being examined as if there were," said Susan Tuccillo, a New York-based vice president and regional compliance officer for Coutts & Co., a subsidiary of London's National Westminster Bank Group. "It's on an ad hoc basis."

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