The Bankers' Blacklist: Unofficial Market Enforcement and the Global Fight against Illicit Financing

The Financial Action Task Force (FATF) has enlisted global banks to keep bad money out of the financial system, altering the domestic policy landscape and transforming banking worldwide. It relies on unofficial market enforcement to punish countries that fail to meet international standards, producing a public noncomplier list that banks use to shift resources and services away from listed countries.

Format: Hardback
Length: 258 pages
Publication date: 15 January 2022
Publisher: Cornell University Press

In her book, The Banker's Blacklist, Julia C. Morse delves into the intricate workings of the Financial Action Task Force (FATF), a global organization dedicated to combating illicit financial flows. Through its efforts, the FATF has successfully enlisted the support of major international banks, significantly altering the domestic policy landscape and transforming the global banking industry.

Trillions of dollars traverse borders daily through the banking system, serving as a vital conduit for trade, investment, and economic growth. However, this same system also presents a vulnerability, allowing criminals and terrorists to move money across borders with relative ease. To address this concern, large economies collaborate through the FATF, an international standard-setting body, to develop and implement laws and regulations aimed at combating illicit financial activities.

Morse's book explores the remarkable impact of the FATF, emphasizing its reliance on unofficial market enforcement. This approach involves market actors punishing countries that fail to meet international standards, thereby incentivizing them to comply with the FATF's recommendations. One of the key tools employed by the FATF is the publication of a public noncomplier list, which banks worldwide use to allocate resources and services away from listed countries. As banks restrict cross-border lending, the domestic banking sector in listed countries advocates for new laws and regulations, leading to significant improvements in compliance.

The Banker's Blacklist provides valuable insights into the peril and power of globalized finance, shedding light on how some of today's most pressing international cooperation challenges can be addressed. It underscores the importance of collaboration, transparency, and effective regulation in ensuring the stability and security of the global financial system. By examining the FATF's successes and failures, Morse offers a roadmap for policymakers and stakeholders to navigate the complex terrain of international financial cooperation and promote a more secure and prosperous global economy.

Weight: 28g
Dimension: 229 x 152 (mm)
ISBN-13: 9781501761515