Despite strict rules set by international regulatory bodies that require banks to "know their customer," make inquiries about the source of large deposits of cash and report suspicious activity, they have failed to do so in a number of high-profile cases and instead have allowed billions in dirty money to be laundered.
Monday, November 28, 2011
Sunday, November 27, 2011
This sounds a lot like how US banks bundled mortgages together:
European banks are being forced to abandon their efforts to sell off trillions of euros worth of loans, mortgages and real estate after a series of talks with potential investors broke down, leaving many already struggling firms with piles of assets they can barely support.
Securitisation is at the heart of such arrangements. Assets with low ratings are pooled together into diversified portfolios in order to attain a higher rating. The resulting asset requires less cash and as a result of the higher rating can be more readily pledged to the ECB or to other banks to borrow against.
The evolving anti-laundering campaign could change the tone of the Mexican government's battle by striking at the heart of the cartels' financial empire, analysts say.
For example, Mexican traffickers are taking advantage of blind spots in monitoring the nearly $400 billion of legal commerce between the two countries. The so-called trade-based laundering allows crime groups to disguise millions of dollars in tainted funds as ordinary merchandise — say, onions or precious metals, as they are trucked across the border.
In one case, the merchandise of choice was tons of polypropylene pellets used for making plastic. Exports of the product from the United States to Mexico appeared legitimate, but law enforcement officials say that by declaring a slightly inflated value, traders were able to hide an average of more than $1 million a month, until suspicious banks shut down the operation.
There is also stubborn resistance among those who profit from their role as middlemen for big transactions.
One such group is notaries, who in Mexico have a function much like attorneys in the U.S. They handle nearly all real estate transactions and have battled a proposal that would require them to report how each purchase was paid for. Notaries say launderers would probably respond by skipping the paperwork altogether when buying cars and houses, only adding to the black-market economy.
Like Israel, Greece is in a period of less than splendid diplomatic isolation, though for very different reasons, and that is exactly what Dimas, in concert with Prime Minister Lucas Papademos, will attempt to reverse in a relatively short period.
Though the focus has been on Greece’s isolation within the European Union, which has for decades been the country’s pillar of security, the geostrategic vulnerability resulting from the economic crisis will test Athens’ ability to respond to Turkish expansionism - from Ankara’s claims to Aegean islets to its objections to Greece delineating its exclusive economic zone with Cyprus.
The American intelligence think tank Stratfor, which is associated with the US intelligence community, declared in a November 21 monograph that “the question for Greece is whether it will be able to accept its much-reduced geopolitical role”. The think tank warns that if Athens does not find a way to be useful to a great power, Greece’s geopolitical role will “depend on the strategies that Turkey adopts”.
the Balkanization of the Balkans continues:
Romanian mayor Florin Cazacu staged a six-day hunger strike last week over cuts to heating subsidies which meant his town of Brad could not afford fuel oil and 10,000 of its residents, public institutions and hospital faced a bitter winter.
"More importantly, at the officer safety level, two of these incidents suggest that US law enforcement officers should expect to engage Cartel foot soldiers armed with AK-47 semi-automatic rifles as standard issue weapons (at a minimum). The 7.62mm armor piercing round of the AK-47 will defeat standard issue US law enforcement body armor.... Additionally, the cartel tactical units/personnel initiated offensive actions against US law enforcement personnel in three of these highlighted incidents."
The trafficking of weapons over the U.S.-Mexico border is well-documented -- lesser known but also significant is the sale of U.S. weapons to Guatemalan government contractors, which are then siphoned off to criminal groups.