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Financial crime is a feature of our global financial system not a bug, pioneering economist Susan Strange recognised. Her message is more urgent than ever.
Image: British Virgin Islands. Credit: MaxPixel
There was a little bit of good news this month for those worried about a tidal wave of McMafia-style financial crime. A new UK government agency tasked with fighting it - the National Economic Crime Centre (NECC) - opened its doors.
I say “little” because financial crime is far more deeply rooted in our financial and political systems than we like to acknowledge.
From the LIBOR-rigging scandal to the offshore secrets of the Panama Papers and ‘dark money’ in the Brexit vote, it is everywhere. In my recent work with anti-corruption group Global Witness, I saw first-hand how ordinary people in some of the world’s poorest countries suffer the consequences of corruption and financial crime. We exposed suspicious mining and oil deals in Central Africa, in which over a billion dollars of desperately-needed public finances were lost offshore. The story is about the West as much as Africa. The deals were routed through a dizzying web of offshore shell companies in the British Virgin Islands, often linked to listed companies in London, Toronto and elsewhere. Even if the NECC is given enough resources and collaborates widely, it has got its work cut out.
One reason all this financial crime is tolerated is that thinkers who shine a light on its systemic nature have been erased from the record. Top of my list of neglected economic...