Wednesday, January 28, 2009

UN Crime Chief Has Fit Of Honesty, Must Die

The #1 rule of money is that it has to go somewhere. Banks have long reaped extra fees for laundering drug cash, they've almost certainly moved into doing open electronic transactions amongst each other, desperation being a mother, and this is the first official admission suggesting it. Via the International Herald Tribune:
The United Nations' crime and drug watchdog has indications that money made in illicit drug trade has been used to keep banks afloat in the global financial crisis, its head was quoted as saying on Sunday.

Vienna-based UNODC Executive Director Antonio Maria Costa said in an interview released by Austrian weekly Profil that drug money often became the only available capital when the crisis spiralled out of control last year.

"In many instances, drug money is currently the only liquid investment capital," Costa was quoted as saying by Profil. "In the second half of 2008, liquidity was the banking system's main problem and hence liquid capital became an important factor."

The United Nations Office on Drugs and Crime had found evidence that "interbank loans were funded by money that originated from drug trade and other illegal activities," Costa was quoted as saying. There were "signs that some banks were rescued in that way."

Profil said Costa declined to identify countries or banks which may have received drug money and gave no indication how much cash might be involved. He only said Austria was not on top of his list.


A. Peasant said...

Does this put a crimp in the straw for funding black ops?

MarcLord said...

not sure--you'd think the meltdown would greatly increase interbank demand for the cash, thus lowering the launder fee. But then the meltdown also probably crimps end user demand, and higher production has already cut street price by at least 70% in the past 7 years. Probably a positive in a negative trendline.