That is my best attempt at a Sun-style headline, but one that the Sun will never use.
The growth of dubious large money movements through the City of London began not long after Elizabeth came to the throne. According to Ian Bullough in his series for Radio 4, How to Steal a Trillion, the seeds were sown in the mid-1950s when the Midland Bank (later to be taken over by the Hong Kong and Shanghai Bank) did a deal with Moscow Narodny Bank. The Russian bank's London branch was sitting on millions of dollars which it did not want to come under the jurisdiction of the USA. This was the time of the Cold War and there was mutual suspicion between the USA and USSR. The Midland offered to borrow the money, which it could then lend out and both banks would make money at a time when formal exchange controls were making large bank profits difficult. Thus was the Eurodollar market born.
Tuesday's episode showed how London banks literally moved money off-shore, avoiding tax as well as regulation, by opening branches in British overseas territories. A point that Bullough missed out of his presentation that UK government deliberately turned a blind eye since allowing poor island nations like the Cayman Islands to make money from a financial regime favourable to money-launderers avoided having to subsidise them.
Yesterday stressed the need for enforcement of company regulation in the UK, a theme which is to be expanded on today.
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