Luxembourg, therefore, did not provide consolidatedsupervision of the BCCI organization.
Luxembourg was thus one of BCCI's homes, yet didnot regulate it, because BCCI did not engage inbanking business there. BCCI's other home, theGrand Caymans, did not regulate any bank licensedthere. The Caymans lack of regulation was preciselythe inducement for banks to charter themselvesthere.
BCCI's operational home, the UnitedKingdom, also did not regulate BCCI's activities: theUK regulator, the Bank of England, considered BCCIto be a foreign bank, based in Luxembourg and theGrand Caymans, and thus the responsibility of regulators in those countries. This neat arrangement by BCCI, together with itsdivision of its auditing functions between twoauditors, one for "Luxembourg" and the other for"Grand Caymans," ensured that BCCI's activitiescould not be adequately monitored by anyone. Asformer Comptroller of the Currency John Heimanntestified:Early on in my government service, I learned onevery important and fundamental lesson; namely, thatthose so inclined to manipulate banks for their ownbenefit find it easiest to do so if they operatebetween different supervisory regimes.Many bank swindles have been built around thispractice. For example, an individual owns a bank inNew York State, another bank in Belgium, a thirdbank in Switzerland, and still another bank inArgentina. Each of these banks is regulated by a