money laundering?Methods used
to hide the origins, ownership and/or destinations of money. Common means are turning
electronic wealth into cash; separating large amounts into smaller amounts (as
large amounts changing hands can arouse suspicion); using currency exchanges;
gambling legitimately, for example, in casinos or bookmakers; making purchases
of expensive items and then selling them ‘legitimately’; creating front
businesses (for example, shops, bars and car washes) that generate large
amounts of cash, which can be banked alongside illegally gained money (as it is
difficult to prove that the money was not earned legally); and placing money in
banks in countries whose money laundering laws are lax or where secrecy is
expected. In essence, money laundering operations are not meant to hide money
away, but to provide the illusion of it being legitimately earned and to divert
suspicion. It is therefore a useful (albeit illegal) means of covering up
criminal gains and terrorist funding, and can also be used to avoid paying tax.
Where paper notes are illegally obtained, money laundering is a means of
churning cash, as serial numbers can make its detection easier. Prevention of
money laundering is of great concern to law enforcement bodies, and
co-operation between nations, particularly their banking operations, are
required to maintain vigilance.
money market?The money
market is a means of acquiring large amounts of money and paying it back extremely
quickly, which can mean in under 12 months or even over one or two days. Interest rates are very
high in this market.
money supply?The money
supply in a given economy is the amount of money it has in total. This can be
arrived at by adding up all the physical cash, wealth in bank accounts and easily
accessible, readily liquefiable assets
owned by the population. Measuring the money supply allows the prediction of
prices, inflation and
the business cycle.