Escalating U.S.-Iran Conflict Exposes U.S. Banks to Compliance Challenges and Market Volatility

U.S. banks have limited direct dealings with Iran, but cross-border clearing passes through multiple layers of customers and offshore intermediaries, leaving banks exposed to OFAC sanctions and AML/KYC requirements. FinCEN said about $9 billion in suspected Iranian shadow-banking activity flowed through U.S. correspondent accounts in 2024, including $5 billion involving shell companies and $4 billion linked to oil and gas companies.

Risks were quickly reflected in markets after the United States and Israel attacked Iran on February 28, 2026. In premarket trading on March 11, JPMorganChase fell 0.38% and Goldman Sachs dropped about 1%. JPMorgan estimated on March 12 that GLD had recorded outflows of about 2.7%, while IBIT saw inflows of about 1.5%.