PurposeThis paper explores the threat that transnational political corruption poses to both the world's development banking and commercial banking sectors.Design/methodology/approachThis paper was written from the perspective of someone who has served as a financial fraud prosecutor, an investigator for the World Bank, and currently as a banking supervisor and regulator. The paper uses three case studies to demonstrate how corrupt actors, using various fraudulent and corrupt schemes, steal funds from development banks, and then launder the illicit proceeds from these schemes into legitimate commercial banking systems around the world.FindingsThe paper describes the reputational and financial risks posed to the commercial and development banking sectors from transnational political corruption, and predicts that these risks will grow as more signatory nations to various anti‐corruption treaties and conventions criminalize the bribery of foreign public officials.Research limitations/implicationsLeft unchecked, both commercial and development banks face growing political, legal, and economic risks from political corruption.Practical implicationsDrawing on the lessons learned from the case studies analyzed in the paper, the author offers a number of practical recommendations aimed at reducing the threat posed to commercial and development banks from public corruption.Originality/valueThe paper establishes a common threat posed by transnational political corruption to both the commercial and development banking sectors.