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Got some dirty money you want to hide? Come to London.

Criminals use the British financial system to hide hundreds of billions of pounds of illegal money each year.

What it means: Did you see the stories about the banker’s wife who spent $16 million in Harrods? She is being investigated because some people don't think she got that money legally. If so, you may wonder how on earth she thought she could get away with it (a $16 million shopping spree doesn’t exactly scream ‘subtle’). But it seems that, actually, most people using dodgy money in London do get away with it.

We’re pretty sure there must be an unspoken rule that people in economics and finance can never call something by a name that actually describes what it is. Take money laundering, which has absolutely nothing to do with laundry. It means making money you got illegally look legit.

London is a really good place for money laundering. That’s partly because there’s lots of normal money passing through it, so it’s easier to slip the dodgy stuff under the radar. And it’s partly because the parts of the British government that are supposed to sniff out and stop money laundering are apparently not very good at their job.

To be fair, it’s mostly not their fault. It takes lots of money and people to discover economic crimes, and the National Crime Agency (NCA) has neither. Its counterparts in Europe have hundreds of investigators; NCA has “a few dozen”. And it’s budget is too small for the work it needs to do, and getting smaller.

Some people think Britain should just leave financial criminals alone. They say the City (which hires lots of people and pays a tenth of the country’s taxes) is already going to lose money from Brexit, so can’t afford to get rid of the criminals’ money too.

And they’re worried that because a lot of money launderers also live and spend money in the UK (they like the universal language and good schools, appaz) that if Britain scares them all off house prices and the pound might fall in value. That might actually be good for some people, but not for homeowners, or British businesses and tourists wanting to sell/travel abroad.

Read our explainer on the financial system.

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Reader Comments

  • RW

    Your right to a degree. You mentioned “the wandering Jew”.

    I elaborate that the Jewish people, historically have tended to migrate almost exclusively to locations that are economically and culturally vibrant already. I would speculate that Jews have thrived in these places and have often improved the bounds of their economies and knowledge base.

    You can also ask; how many massive entertainment conglomerates, Nobel winners or billionaires has Isreal developed? If Jews are so capable, why isn’t Tel Aviv the Rome of our time?

    Jews are successful because they value education, maintain a strong social cohesive, they actively monitor and have a good sense for Zeitgeist wherever they are and they carefully choose the places they settle and congregate themselves heavily in these choice locations.

    But most importantly (haulocaust increased the importance of this aspect), they actually designed their culture for success. They not only attend Harvard, they use what they learned to better the group as a whole. With as much, they studied intricate networking systems, adapted to it and in many cases improved upon them. (See how Japan acquired Aegis warships and made them better).

    Of course there is nothing wrong with any of this. It’s when you elaborately gain disproportionate power in any society where you would stand out, you must take care when attempting to make a society better (Civil Rights movement) and rewriting that society all together (mass immigration). Ask blacks in China, Mexico, Philippines or India how much opportunity they have? Go to businesses owned by their American diaspora and see how many blacks they hire. Go to Silicon Valley and see how many East or South Asian tech workers wish they could work with more black people. California might work as a state, but as a nation, I think your rolling the nuclear dice here. I hope we can succeed as a tolerant pluralistic superpower but at this stage in human societal development, it’s a pipe dream.

    And if Jews really are the icon for success, they would see that fundamental human successes happen over generations. Just look at the rest of the planet? Are we ready?