Trust in Financial Institutions

From MgmtWiki
Jump to: navigation, search

Full Title

Trust in Financial Institutions Should be a Primary Role of Good Governments

Context

Since the earliest recorded human history, governments have been in the business of establishing a trusted medium of exchange. Primarily so that they can fund their own operations, collect taxes and encourage trade.[1]

The rules that governments use today to control their fiat currencies are focused on two primary problems, debasement by techniques like counterfeiting and misuse like money laundering. This article focuses on the governments' efforts to control misuses and the trouble that their efforts create for identifiers of humans and other legal entities.

Recognizing Good Governments

The major challenge is that some governments profit from activities under their control that would be illegal in other parts of the world. This is especially true of money laundering. Before the flow of money can be controlled, it must be tracked. That typically means that governments force bankers to identify the entities that move large amounts of money, especially movement across national boundaries. What this means is that some international body or some country, like the United States, that has a vested interest in maintaining its currency as a reserve current held by other counties, will establish rules and rate other governments on their adherents to those rules. There is an international body that performs this function, but there are also officious bureaucrats in the EU that want to appear to be helping, by targeting the small fish. Read on for the clown circus, I expect that this effort must be run by inspector Clouseau.

Financial Action Task Force

The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 by the Ministers of its Member jurisdictions. The objectives of the FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. The FATF is therefore a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.

Members are:

  1. Argentina
  2. Australia
  3. Austria
  4. Belgium
  5. Brazil
  6. Canada
  7. China
  8. Denmark
  9. Finland
  10. France
  11. Germany
  12. Greece
  13. Hong Kong (China)
  14. Iceland
  15. India
  16. Ireland
  17. Israel
  18. Italy
  19. Japan
  20. Korea
  21. Luxembourg
  22. Malaysia
  23. Mexico
  24. Netherlands Kingdom of
  25. New Zealand
  26. Norway
  27. Portugal
  28. Russian Federation
  29. Singapore
  30. South Africa
  31. Spain
  32. Sweden
  33. Switzerland
  34. Turkey
  35. United Kingdom
  36. United States

European Commission

Has taken it upon itself to issue lists of third countries with weak anti-money laundering and terrorist financing regimes. Which include 4 possession of the United States and Saudi Arabia, which is jointly responsible for the Terrorist Financing Targeting Center (TFTC), a collaborative approach to confronting new and evolving threats arising from terrorist financing.[2]

But chose not to list these countries which are either part of the EU or close trading partners, but are on the FATF list or have been sanctioned by the EU:

  1. Isle of Man
  2. Norway
  3. Austria
  4. Portugal
  5. The Channel Islands
  6. Luxembourg or Malta

It seems like the EU bureaucrats primary goal is to find someone to blame, other than their members, for the problems with money laundering.

References

  1. James Buchan, Frozen Desire. (1997) ISBN 0-374-15909-2
  2. Jack Ewing +1, Europe Flags U.S. Territories in 'Dirty Money' List. (2019-02-14) The New York Times p. B4