Skip to main content

The rotten stench of the City sewer

STEVEN WALKER looks at how the actions of Britain’s leading banks have earned the City of London its reputation as the money-laundering capital of the world

THE Financial Conduct Authority has launched criminal proceedings against tax-payer owned Natwest Bank for failing to comply with anti-money laundering rules, in the first attempted prosecution against a British bank under the 2007 law.

Natwest faces a potentially unlimited fine after the FCA alleged it had failed to properly monitor the actions of a gold dealer. The customer was Fowler Oldfield, a Bradford-based jewellery wholesaler that was shut down after a police investigation in 2016.

The FCA said the company paid £365m into its Natwest account in a series of increasingly large cash deposits between 2011 and 2016. A judge in a court case heard in 2019 said the 122-year-old gold dealer was involved in “an extremely sophisticated” money laundering operation, with up to £2m in cash being delivered to the business each day.

This latest news is yet another example which has earned the City its reputation as the money-laundering capital of the world, according to the UN office on drugs and crime.

A litany of illegal behaviour can be traced back in a long line to the Thatcher government’s deregulation of the City in the 1980s. This was happily continued by Labour prime minister Tony Blair and chancellor Gordon Brown who notoriously maintained a relaxed attitude to City regulation as they sought to ingratiate themselves with the rich and powerful.

This enabled City financial institutions to take huge risks with customers and money laundering for Mexican and Colombian drug cartels was facilitated. Natwest infamously set up a special unit which manipulated lending regulations, bankrupted viable businesses and then profited from the remaining assets. Some 16,000 businesses are estimated to have been lost, costing massive job losses between 2010 and 2016.

Barclays and taxpayer-owned RBS are among five banks who were recently sued over allegations of rigging the foreign-exchange market.

The banks are facing a class action claim by investors understood to be in excess of £1 billion, alongside US giants JP Morgan, the bank that pays Tony Blair £2 million a year for “advice.”

The suit was filed with Britain’s competition appeal tribunal (CAT), alleging that the five banks broke competition laws by unlawfully manipulating the foreign-exchange market between 2007 and 2013.

The class action suit comes after all of the banks except one were fined a total of €1.07bn (£936m) in May 2019, for taking part in foreign-exchange rigged trading cartels. The European Commission handed out the penalties relating to collusion over trading in 11 currencies dating back more than a decade.

The big four accountancy firms are happy to act as midwives to banking corruption by signing off dodgy accounts in return for massive fees.

The capitalist financial crisis which began over a decade ago and intensified through flawed accounting, enabled US sub-prime lenders and then mainstream British banks such as RBS, Lloyds TSB and HSBC to pollute and fiddle their balance sheets without auditors raising any objections. A parliamentary committee concluded that “the complacency of the bank auditors was a significant contributory factor” in causing the 2008 crash.

Leaked documents showed that HSBC, the RBS, Barclays and Coutts Bank had waved through up to £65bn of transactions linked to a major scam in Russia. This had first come to light in 2014. Much of the money is believed to be linked to organised crime and corrupt officials, who were seeking to clean their cash so that it could be spent without suspicion.

Governments and gutless financial watchdogs are in awe of the City and the financial institutions who constantly remind them that they are the engine driving the British economy and return billions in taxes to the Treasury while upholding the highest standards of fiscal rectitude and probity.

In truth, they dodge taxes, robbing the NHS, schools and welfare services of funding. The Panama Papers in 2016 leaked documentation that revealed industrial-scale fraud and corruption involving many high-profile individuals and businesses dodging billions in British taxes.

HMRC colluded with non-prosecution court cases by lowering fines and sanctions in order to cover up the reputations of those parasites. Superficial changes to money-laundering crime detection simply encouraged criminals to move into high-street money shops which can be found in every main town and city.

The Metropolitan Police has publicly admitted that these money-service businesses, which specialise in overseas money transfers, are playing a significant role in money laundering and the rise of violent, drug-related crime in London.

Behind the shiny London skyscrapers staffed by the privately educated Oxbridge suits and covered with the veneer of respectability, is a culture of greed, corruption, criminal activity, obscene salaries, gigantic bonuses and industrial-scale fraud all linked to drug-dealing, violent organised crime, broken businesses, unemployment and murders.

This is capitalism untethered to any moral or humanitarian aim operating with impunity and safe in the knowledge that no serious sanction will be imposed.

OWNED BY OUR READERS

We're a reader-owned co-operative, which means you can become part of the paper too by buying shares in the People’s Press Printing Society.

Become a supporter

Fighting fund

You've Raised:£ 3,273
We need:£ 14,727
24 Days remaining
Donate today