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Money Laundering and Financial Markets

Money Laundering and Financial Markets Wolfgang Hetzer 1 Money Laundering and Financial Markets 1. INTRODUCTION International financial markets are part and parcel of modern life. They reflect all major changes to the economic framework conditions. These markets are both the most important symbol and the key instrument of globalization. 2 Derivatives are particu- larly important. They encourage deregulation while tempting companies and private persons to avoid paying tax. Derivatives also weaken organized political structures. Some people even believe that these instruments have revolutionized the economic system. Derivatives, like hedge funds, can also be used for money laundering. 3 In the aftermath of 11 September 2001, the US Treasury recently decided to tighten up controls on hedge funds, as it was suspected that terrorists were among those using them to launder money. 4 This is an alarming conclusion, especially as money laun- dering is one of the ‘core activities’ of organized crime. 5 With the liberalization, deregulation and globalization of the financial markets, the problem of money laun- dering has taken on a new dimension. Not only has the scale greatly increased, the concomitant danger to the economy, society as a whole and the world of politics has also grown far greater. Following the http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png European Journal of Crime, Criminal Law and Criminal Justice Brill

Money Laundering and Financial Markets

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Publisher
Brill
Copyright
© 2003 Koninklijke Brill NV, Leiden, The Netherlands
ISSN
0928-9569
eISSN
1571-8174
DOI
10.1163/157181703322681104
Publisher site
See Article on Publisher Site

Abstract

Wolfgang Hetzer 1 Money Laundering and Financial Markets 1. INTRODUCTION International financial markets are part and parcel of modern life. They reflect all major changes to the economic framework conditions. These markets are both the most important symbol and the key instrument of globalization. 2 Derivatives are particu- larly important. They encourage deregulation while tempting companies and private persons to avoid paying tax. Derivatives also weaken organized political structures. Some people even believe that these instruments have revolutionized the economic system. Derivatives, like hedge funds, can also be used for money laundering. 3 In the aftermath of 11 September 2001, the US Treasury recently decided to tighten up controls on hedge funds, as it was suspected that terrorists were among those using them to launder money. 4 This is an alarming conclusion, especially as money laun- dering is one of the ‘core activities’ of organized crime. 5 With the liberalization, deregulation and globalization of the financial markets, the problem of money laun- dering has taken on a new dimension. Not only has the scale greatly increased, the concomitant danger to the economy, society as a whole and the world of politics has also grown far greater. Following the

Journal

European Journal of Crime, Criminal Law and Criminal Justice – Brill

Published: Jan 1, 2003

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