Thursday, 22 August 2002

The Dark Face of International Finance

by David Guyatt

Ever since the Nugan Hand Bank affair of the late seventies, bank crashes have followed a slick and familiar template. Narcotics trafficking, gun running, CIA covert ops., money laundering and fraud on a massive scale are just some of the ingredients that have sent bank after bank crashing to its knees. Once the smoke clears bank depositors and shareholders are left picking up the tab.

With a spate of billion dollar financial scandals hitting the headlines, 1995 hasn't been such a good year for harassed bank regulators and shareholders. Calls for tougher regulation of the burgeoning financial markets in the wake of the Daiwa, Barings' and other debacles is little more than a PR palliative designed to calm the nerves of a cynical public who still form the hard backbone of bank depositors. With the best will in the world regulators can't keep pace with an evolving and sophisticated money-machine that daily shuffles upwards of twenty four billion E-bucks around the globe in the blink of an eye1.

Yet tough regulation even when emplaced are easily and regularly evaded. Banking and crime are Cimmerian hand-maidens for the simple reason that banks are where the money is. Having access to the money and being "connected" is the name of the game where the stakes are other people's money. This is the dark side of the financial community, a hidden face that largely goes unreported until, that is, a major banking scandal hits the front pages. Squirming under the glare of public attention successive bank disclosures have revealed the sinister connections that leading banks have with organised crime and the intelligence community. The money-shuffler's of spooksville need "black" funds to finance covert operations and appear happy to exchange guns and military hardware for dope that is, in turn, peddled for dollars used to finance other black operations. This happy-go-lucky "Ferris wheel" approach to money-raising on the part of the intelligence community reveals a long history of entanglements with the Mafia.

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