I just finished the episode of Dirty Money: Cartel Banks. And I still don’t get why a bank would purposely launder money with the risk of getting fined. I know they don’t usually get fined much anyway, but how does the actual bank benefit from this
Edit bonus question : can the government not sieze the illegal laundered money? I mean they see the money in the bank and they know it’s laundered and its illegal.
In: Economics
A bank makes money by giving loans. Turning a blind eye to money laundering gives them more money to loan out, which means more profit for them.
At that point it becomes a risk assessment. If they believe they can make $30,000,000 off the laundered money, and that the fine *if they’re caught* will be around $10,000,000, they’re going to look the other way and pocket the money.
TLDR: the rewards outweigh the risk to the bank.
Banks charge a fee for each transaction. Often banks charge higher fees to compensate for transaction that are riskier and could result in a fine. For many, it is the cost of doing business as the fines are always less than the total commission fees collected.
That’s why they’ve been called banksters since the 20s.
Money launderers take a cut of the money in exchange for laundering it. The fines are rarely anywhere near the amount of profit they make. And that’s assuming they get caught.
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