From the article: One of the most significant, but least covered, parts of the war on terror has been the Treasury Department's effort to shut down al-Qaeda and other jihadist groups' access to financial institutions. It's an attractive way of tackling the problem: Freezing accounts here isn't as expensive as sending in troops or airstrikes, and no civilians get hurt.
Except the second part might not be true. A report released last week by the Center for Global Development, authored by a working group chaired by visiting fellow Clay Lowery and senior fellow Vijaya Ramachandran, argues that laws meant to counteract money laundering and terrorism financing are encouraging broader "derisking," in which Western banks cut off ties with financial institutions in the developing world so as to reduce the odds that they'll run afoul of regulations. The result is that developing-world banks, money transfer organizations (which handle remittances), and nonprofit organizations are losing access to the financial system as a whole.
Read full article here.
