Tags: Credit | Crisis | Increase | Mafia | Lending

Credit Crisis Sparks Increase in Mafia Lending

By    |   Thursday, 29 Jul 2010 08:47 AM

Until recently, it appeared that short sellers were the only ones to benefit from the financial crisis.

Now you can apparently add the mafia to that list.

The crime group has stepped up its money laundering operations in Italy, as bank credit grew scarce in the wake of the meltdown, the country’s central bank reports.

The Bank of Italy’s financial intelligence unit tracked 15,000 suspicious transactions in the first six months of 2010, Anna Maria Tarantola, the central bank’s deputy general director in charge of banking oversight, told Bloomberg.

That’s up 52 percent from a year earlier and beats the total for all of 2008.

“The crisis has given organized crime room to thrive because access to credit has become more difficult,” she said.

“Whoever holds large amounts of cash, like crime groups, can make investments that aren’t possible for others. They can now invest in fully legal businesses.”

Revenue for organized crime groups rose 4 percent last year to 135 billion euros ($172 billion), according to Rome-based anti-racketeering group SOS Impresa, Bloomberg reports.

The police recently arrested more than 360 suspected members of ‘Ndrangheta, Italy’s wealthiest organized crime group, around the financial capital of Milan.

In the United States, fortunately, there hasn’t been talk of increased mafia activity. But bank lending activity remains depressed.

“With credit demand weak and with banks writing down problem credits, bank loans outstanding have continued to contract,” Federal Reserve Chairman Ben Bernanke said in congressional testimony.

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Until recently, it appeared that short sellers were the only ones to benefit from the financial crisis. Now you can apparently add the mafia to that list. The crime group has stepped up its money laundering operations in Italy, as bank credit grew scarce in the wake of...
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Thursday, 29 Jul 2010 08:47 AM
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