Like a Greek play, the inner sanctum of the 1% meme is a melodious and harmonic chorus droning across the globe. The rhetoric has become common but the message obscures the realities of a true growth in wealth…shadow banking. Like a green shoot of new grass emerging between the cracks of an urban sidewalk. Shadow banking is expanding beyond earshot or sight. Obscured by white noise that renders it out of news media range it remains an enigma. Its moniker is absurdly descriptive. Shadow banking is unregulated activities by regulated institutions. It serves as a very important structure within the global economic stream. However, like the “Mighty Mississippi”, this monetary river rushes into the hands of ideological extremists all over the world.
Hawala or Hundi
Regulated global monetary exchanges are growing richer while participating in money laundering of terror donor funds. Funded in the billions from sovereign and business leaders these dollars transect borders. Creators of instant billionaires their ever-greening inner sanctum of wealth has become the driver of the burgeoning bottom lines to government reserves.
This green bubble feeds the economic stream of all our lives in every developed nation. It underlines the economic fabric of those of us living in foot tapping porch homes to Wall Street. Yet few of us know of its existence.
Doing its work as an undercover agent of monetary exchange the societies of Hawalas is exclusive. Those actors that serve as go between and the gatekeepers are the Hawalers. In support of the horrors of radical and bloody ideological social reengineering, no federally mandated agency sanctions its money exchanges. Hawala dealers function within centuries’ old code of ethics reliant on trust between ethnic tribal unions and families. If they were recognized as a sovereign nation, their GDP would rank among the highest.
We can enjoy a stimulating debate on whether hawaladars are or have been a needful economic structure. Because the purchasing power of terrorists and their organizations serves as the underlying structure of major economies. These funds earmarked for terrorists proliferation hourly navigates its way into regulated sovereign banking.
The “politicalization” of Hawala by rich ideologists is rapidly becoming problematic. So how do you track and punish those that traffic in money laundering? You introduce the regulated offender to the scales of justice. You punish the participating institution thereby staunching the flow and minimizing the number of laundering havens (BNP Paribas). Nevertheless, how often does the politics of the locale, especially in underdeveloped nations turn a deaf ear; nay they sanction the religion of Hawala economics.
The role of transnational watch dogging of Hawalas has changed its face and developed strong regulatory muscle. It resembles the Eurasia Group of the Financial Task Force (FATF).
Eurasia Group of the Financial Action Task Force (FATF) is being embraced and forming new partnerships in its motivation to drive Pakistani Hawalas from the borders of neighboring countries. Somewhere in the vast and complex dendrites of the Hawala connectivity, someone has discovered that the only pathway to circumventing monetary funds to terrorists’ hands is to clamp off the artery that allows it.
Nevertheless, the realities of a dynamic organism are that it creates what biologists call an anastomosis. Like a blocked blood vessel, shadow bankers will circumvent an obstructed avenue of exchange then invent a new way to meet hawala needs.
Crypto-currency enters from the wings offering yet another popularized avenue to the swift expediency of money transferring, from one unregulated hand to another. However, that is subject matter for another posting.