Following the money: from Laundromats to Central Banks

GIJN 2023

Marty Steffens University of Missouri

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Money laundering is a $4 trillion dollar enterprise – representing 5 percent of world GDP. 

By itself, it’s the world’s third largest business.

The flow of illicit funds allows drug and human traffickers, arms dealers, terrorists, and smugglers to operate with impunity.

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Impact

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Money laundering transfers economic power from financial markets and governments to criminals.

Citizens are the victims. In many cases, money laundering results in complete takeover of legitimate government, or state capture – as in Hungary, where there is also media capture.�

What are Illicit Funds Flows? (IFFs)

While all of us enjoy a globally connected banking system, criminals exploit this fragile network, using banks to move illicit funds across borders. 

“No financial institution or country is immune. ..Ultimately, society pays the cost through an erosion of trust in the integrity of the financial system, often leading taxpayers to subsidize failing banks and limiting customer access to credit.”

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Money laundering touches all aspects of life, from art to real estate to banks to the highest level of sports.  To do its work, it uses tax havens, shell companies and freeports.

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But it also hides in plain sight, in the corruption of large and small banks, hedge funds and even Central Banks, as we shall see.

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