FinCEN Files: Investigation into Dirty Money Transfers from Major Global Banks

At least $ 2 trillion in suspicious transactions were carried out between 2000 and 2017 by several major global banks. This is what an investigation by the International Consortium of Investigative Journalists, made up of 400 journalists from the media in 88 countries, including the investigation units of Radio France and the newspaper Le Monde, reveals.
For their investigation, ICIJ journalists were able to obtain "suspicious activity reports". These are top-secret documents that US bank internal compliance officials send to US financial intelligence agencies when they detect questionable money transfers.

According to these documents, 2,000 billion dollars in suspicious transactions may have been carried out. It is dirty money linked to drugs, corruption, organized crime and terrorism.

Large banks are singled out like JP Morgan, Deutsche Bank, Bank of New York Mellon or HSBC. They ensure, however, that they make significant efforts to combat financial crime an…

US Federal rate cut adds to panic

The US central bank "The Federal Reserve System" announced a rate cut of 0.5 percentage points on Tuesday to target a range of 1% to 1.25%. It was his first emergency decision since 2008. Markets first reacted before rising again. If she wanted to calm the markets, she’s missed. Initially up, the stock market fell again on Tuesday as the US Federal Reserve pulled out heavy artillery against the economic effects of the coronavirus. The Fed cut interest rates by 0.5 percentage points, citing risks to the US economy from the spread of the virus in a statement. It is the first time that the American institution lowers its rates in emergency since the financial crisis of 2008. Its next meeting was scheduled for March 18, but it had announced Friday already to be ready to act to counter the economic damage and financiers of the epidemic.
 
US central bank - The Federal Reserve System

"The magnitude and persistence of the effects" of the coronavirus remains "very uncertain," said Fed officials. Taken unanimously, the decision to lower rates, now in the range of 1% and 1.25%, should provide "a significant boost to the American economy". She added that we should now expect "more formal coordination" between G7 countries on the coronavirus.

Surprising drop

This drop in Federal Reserve interest rates is surprising, says Fabrizio Quirighetti, of Decalia in Geneva, "because it comes when the Fed has a meeting scheduled in two weeks and the G7 meeting on Tuesday morning did not not lead to the announcement of a concerted reaction. Maybe the Fed just warned its counterparts that it was going to cut rates. It is also true that the European Central Bank or the Bank of Japan have less leeway to further lower their rates. ” Just like the SNB, whose rates are already negative.


A cartridge used for nothing?
 
The fact remains that such a decision by the American central bank will not treat the sick or reopen Chinese factories; However, the main problem created by the coronavirus is precisely to have disrupted the global supply chain, continues the chief investment officer of Decalia.

For him, the objective of this intervention by the Fed is to prevent a stronger correction of the markets weighing on the economy. Not sure, however, that the markets will join, concludes Fabrizio Quirighetti: "If they end the session down, it will mean that they believe that the Fed has made a mistake in monetary policy and that it has spent a big canister for nothing. " The facts seem to prove him right: at the end of the day, the markets were in the red. The 10-year US bond rate was down.

Likewise, "the Fed's cut will not be enough to avoid a major economic disruption," said Andrew Mulliner, global bond portfolio manager at Janus Henderson Investors, in a note released just after the announcement. In addition, this drop was so expected, now or in the coming weeks, that it was already taken into account by the market. The specialist draws a parallel with 2008, when the economy was on the brink of the abyss: "That we see a similar response from the Fed today can both be applauded - better to act boldly than shyly in these uncertain times - and feared: how much can the current situation deteriorate? ”


Central bank action in China and Australia
 
The Bank of Japan, the Bank of England and the European Central Bank have said they are ready to intervene. But only their Australian and Chinese counterparts have taken action. The former lowered interest rates to an all time low to 0.50% from 0.75%. The second has injected liquidity, eased the credit it gives to financial institutions, among others, to facilitate the restart of activity in a country still largely paralyzed.