Banks Still Getting Illegal Cash

It looks like illegal cash may be the only thing keeping some banks afloat.

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."

Of course if drugs were legal that cash flow would stop. Which is a very good reason for bankers to be against legalization. After all the drug money allows them to live in a better neighborhood. And there is no war going on in such neighborhoods. A win-win. Except for the poor suckers stuck in the war zone. You know. THOSE people.

If you want to read deeper into the subject may I suggest:

Narco Dollars 1
Narco Dollars 2
Narco Dollars 3

By Catherine Austin Fitts, Assistant Secretary of the Federal Housing Commission under Bush 1, and a former managing director and member of the board of directors of Dillon Read & Co, Inc. She says that it will help your understanding to read the novel Black Money by Michael Thomas. You can also visit her blog Catherine Austin Fitts blog for the latest in financial news. You can also read Narco Dollars in a black on white format at Narco Dollars.

Cross Posted at Power and Control

posted by Simon on 01.27.09 at 06:42 PM










Comments

Unfortunately, if there's more money to be made by keeping something illegal than by making it legal, then making it legal will not be an option.

Eric Scheie   ·  January 27, 2009 11:32 PM

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