Could it happen again? Even now, is another financial institution bending and breaking the rules in the service of its own grand enterprise, robbing the poor and giving to the rich?

The answer must be yes, for history is replete with swindlers large and small. The schemes vary from person to person, age to age, but since Jesus threw the money changers out of the temple, we have been victims of those who would transform the world's financial institutions into a den of thieves.

There is some truth in the argument of BCCI's defenders that the bank was only engaging in activities pursued by many other big international banks. Indeed, as sophisticated bankers the world over channel money through a maze of bank secrecy havens and front companies with the push of a computer button, opportunities for corruption on a world scale are almost endless. The great lesson of this scandal lies in the surprising vulnerability of international banking regulations. And its lasting value depends on recognizing exactly where those weak points are located and how they can be strengthened, if not eliminated.

The vulnerabilities exploited by the Bank of Credit and Commerce begin with the bank's very structure. Whether driven by a deep desire to avoid another nationalization or by a criminal design, Agha Hasan Abedi set up a bank that was located everywhere and regulated nowhere. This is the most glaring regulatory failure exposed by the BCCI scandal. Global financial systems have been constructed without the global coordination and laws needed to keep them honest. The existing patchwork of financial regulation is decades behind the times-and the crooks.

As Justice Louis Brandeis used to say, sunshine is the best disinfectant. At the very least, the world's leading nations must establish uniform standards for banks that do business across borders. Most important among these requirements must be home-country supervision in which a single regulatory authority has the information-gathering tools to supervise an institution's activities worldwide. BCCI played a shell game with regulators, shifting its financial data from jurisdiction to jurisdiction without detection because no single country had responsibility. As a result, BCCI was able to extend its Ponzi scheme by drawing in larger and larger quantities of fresh cash and concealing its deteriorating condition. The Bank of England knew for years that there was fraud inside BCCI, but the regulators believed the incidents were isolated and could be resolved because they never saw the whole picture.

In America, the Federal Reserve Board and Congress already have taken a step in the right direction, with legislation establishing standards for entry and expansion of foreign banks within the United States. The heart of this reform is the demand that every bank have consolidated home-country supervision. No foreign bank could do business in the United States unless its books and records were open to full inspection by regulators in the country where it is based. With foreign bank operations controlling more than a fifth of the banking assets in the United States, this legislation is essential.

Another element is necessary for this step to be effective: Complete and accurate financial information must be shared with regulators in other countries where international institutions are operating. There will always be countries that refuse to participate in such international accords. Those banks and other entities that choose to shroud them selves in the secrecy laws of these inevitable offshore havens must be recognized as pariahs and their activities restricted severely. The BCCI affair has heightened the awareness of regulators and politicians in major countries to the necessity of such cooperation and to the steps that must be taken against those who shun participation.

The most charitable interpretation of the federal government's reaction to the massive evidence accumulated during Operation C-Chase is that it was a monumental case of miscommunication and interagency bungling. The Customs Service failed to provide the additional resources requested over and over by Bob Mazur and his team, so more than 100,000 documents seized from the bank went unexamined for critical months. In testimony before John Kerry's subcommittee in November 1991, Mazur said that "literally hundreds of leads" about additional allegations of wrongdoing by the Bank of Credit and Commerce International went uninvestigated for precious months. "It was a costly time out," said Mazur.

In addition, the Justice Department failed to recognize the scope of the BCCI case in the early days. This was in part due to the system of decentralized control established within the department during the Reagan era. Local U.S. attorneys around the country were granted enormous power over their own cases and, as a result, main Justice in Washington was often ill-informed about the true scope of a case and reluctant to get involved.

There are signs of hope at the Justice Department. In testimony at his confirmation hearings in November 1991, incoming Attorney General William Barr acknowledged that the BCCI case had not been handled in the best way between the indictments in 1988 and July of 1991, when the department finally began to coordinate its investigations of the bank. And Barr promised that the problems would lead to a reexamination of the policy of decentralization within the Justice Department.

As for the Federal Reserve System, its primary failing in the BCCI case was the inability to discover the true ownership of First American Bank and to detect BCCI's clandestine takeovers of other American financial institutions. That, too, may be on the mend. In testimony before congressional committees in the fall of 1991, top Fed officials said that more money would be spent to hire and train criminal-type investigators and better use would be made of the Fed's subpoena power in the future.

Bank regulators and law enforcement cannot be expected to prevent fraud altogether, but it is clear that the Bank of Credit and Commerce International should have been closed far sooner. With adoption of proper standards and new coordination among regulators and law enforcement authorities, there is a chance that the next BCCI will not be so devastating to unsuspecting customers and to faith in government institutions.

A few minutes before ten o'clock on the morning of September 11, 1991, a Wednesday, Clark Clifford walked slowly into a crowded hearing before the House Banking Committee, clutching an old gray fedora and struggling to salvage the reputation he had built over fifty years as a man of probity and honesty.

Clifford sat at the long witness table, with partner and prot6ge' Robert Altman at his side, and told the congressmen that he and Altman had clear consciences. At no time did they know that BCCI owned the controlling stock in First American Bankshares. Never did BCCI have a say in management decisions at the Washington bank. He and Altman were entitled to the millions they made by purchasing stock in First American's parent with money borrowed from BCCI.

"My judgment is questionable," Clifford conceded, spreading his hands in a theatrical gesture. "I guess I should have learned it some way. I've been in this business a long time. It's been a very active life. You learn a good deal from government. I guess I should have some way sensed it. I did not. I would have given anything if I could have avoided this past year. Still, I have to face it. In the process, I'm going to work as hard as I can in an effort to try to preserve my good name."

For eighty minutes, rarely referring to notes, Clifford described how he had gotten involved with BCCI and later First American, how he and Altman had maintained contact with Abedi because they thought BCCI and its president were the financial advisers to the stockholders in First American. For five more hours, after a two-hour break for Clifford to rest, he and Altman answered questions from members of the banking committee. Altman answered most of the questions. He described diligent efforts by himself and other lawyers to investigate allegations that BCCI controlled First American's stock, explaining that they had come up with no evidence, only steadfast denials from First American's shareholders.

Never did Clifford or Altman give an inch in the face of the ill-informed, skeptical questioning from the congressmen. Republicans were the most hostile, led by Representative Toby Roth of Wisconsin, who said to Clifford: "Others may believe your statement, but I don't believe a word of it." Democrats seemed more sad than angry, as illustrated by the comment of Representative Jim Bacchus of Florida, to Clifford: "Sir, I've admired you for many years, and I've looked forward to the day that I would have an opportunity to meet you. I regret that it's today in these circumstances."