No one likes to talk about it, but handling discreet money generated by criminal operations has been a growth area for banks. Now there is a threat to their business. New legislation, better co-operation among enforcement agencies and a flurry of mutual assistance treaties have at least a fighting chance of denting the money-laundering game.
"Handling discreet money has been a booming business for banks," said Stephen Trott, assistant attorney general in the US Justice Department in Washi"But in the last five years wave negotiated anetwork of co-operative agreement all over the world aimed at cleaning up international banking."
Between 1977 and 1985 the US signed treaties with several countries including the Netherlands, Switzerland and Turkey. In 1986 three further agreements were signed with Canada, Thailand and the Cayman Islands. Michael Mann, deputy enforcement chief at the Securities and Exchange Commission (SEC) in Washington shares Trott's optimism. "The trail that crooks leave today is unmistakeable. It's easily traced to the foreign bank involved," he said.
Because of the size of the drugs problem in the US, and the proliferation of abuses of its securities markets related to foreign banking centres, it is understandable that the Justice Department and the SEC should be leading the clean-up campaign.