UNODC chief Costa: Illegal drug trade saved banks

This is pretty strange. According to the UN’s “drug czar,” we can thank the liquidity of black market drug trade money for saving some banks and maybe even some countries’ economic systems.

VIENNA, Jan 25 (Reuters) – The United Nations’ crime and drug watchdog has indications that money made in illicit drug trade has been used to keep banks afloat in the global financial crisis, its head was quoted as saying on Sunday. […]
“In many instances, drug money is currently the only liquid investment capital,” Costa was quoted as saying by Profil. “In the second half of 2008, liquidity was the banking system’s main problem and hence liquid capital became an important factor.”
The United Nations Office on Drugs and Crime had found evidence that “interbank loans were funded by money that originated from drug trade and other illegal activities,” Costa was quoted as saying. There were “signs that some banks were rescued in that way.”

Well maybe we’ve finally found a bizarre and dysfunctional reason for keeping drugs illegal — the banks need the unregulated cash flow.
Of course, if we weren’t wasting all our money on an unproductive war on drugs and converted the black market to economic productivity, we wouldn’t need the liquidity of black-market cash.

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