Were Banks Fuelled By Drug Money?

With entry level staff operating a drug trafficking ring out of their Melbourne office, the Australian ANZ bank is still reeling from the police investigation.
The U.N. Office on Drugs and Crime has revealed that billions of dollars, from the illegal drug business, was used just over a year ago, as the only thing that kept the global financial system from collapsing at the height of the banking crisis.

U.N. representative, Antonio Maria Costa, said "In many instances, the money from drugs was the only liquid investment capital. In the second half of 2008, liquidity was the banking system's main problem and hence liquid capital became an important factor."

Costa said "Inter-bank loans were funded by money that originated from the drugs trade and other illegal activities". Banks were reticent to loan money to one another, as the system basically became paralyzed.

Banks in Europe and the United States lost approximately $1 trillion due to investments whose value was reduced so drastically that they could no longer be sold for a satisfactory price, or "toxic assets and" bad loans, according to the International Monetary Fund, between January 2007 and September 2009. This headed towards failure, forced acquisition of many financial institutions, or government takeover.

In order to keep them afloat, Costa said his office has proven evidence that $352 billion, from the illegal drug trade, was directed to banks at this point.

Costa's office chose not to openly identify any of the involved banks, claiming its role is to identify problems, not point fingers. It had received its information from the governments of Switzerland, Italy, the United States and the United Kingdom.

The flow of this money into the banking system has now "laundered" it, making it functionally impossible to track. In order to conceal their profits from law enforcement, drug cartels have typically kept their earnings in cash or offshore accounts.

The day after he was sentenced to four years, for corruption in December 2009, the mayor of Kabul was back at his desk. The home of opium, Afghanistan, is reported to be awash in drug money, in a country where corruption is a greater threat than terrorism.

The daily loss deprives the poverty-stricken government of tax money that could be used for desperately needed improvements in education, medical care and transportation, officials said.

It was reported the world's bankers were hooked on the drug money, like junkies. It is firmly believed it most likely did more to rescue the world's banking system than all the government bailouts. One of the poorest nations on the planet exports $10 million every day, in drug money. Most of it right out of Kabul airport.

Now the British currency exchanges have refused to sell Euro 500 notes, which are almost solely used by organized crime, in drug related transactions.

Because large sums can be concealed with relatively few bills, the 500 is the note of choice by criminals.

Recently a woman was photographed carrying a cereal box containing 300,000 euros.

About Were Banks Fuelled By Drug Money?
For more information: http://www.tropicpost.com/banks-and-drug-money/

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