Financial Cryptography

Even more interesting would an analysis of what happened to money laundering in the aftermath of hurricane Ivan's visit to Cayman and the Bahamas!

Well, that's a grand question, and here's my prediction: nothing.

The reason for this is many-fold. Firstly, it is near-impossible to measure money laundering, so any analysis would be hopelessly crippled. This is why there are no studies on the effectiveness of anti-money laundering. Money laundering almost by definition is money the authorities can't see or trace so easily, and any time they get close, the money launderers move across to some where else.

Secondly, that which is measured today is a proxy, a report, not the actual attack: A fincen report is not the attack, so if the fincen reports go down after a hurricane, this almost certainly means the banks are closed. Also, behind every 1000 fincen reports there might be one potential ML. Indirect, 0.1%. Whereas when a spam gets stopped, that's an attack that's gone. Direct, 100%.

Thirdly, the notion that money laundering "happens" in the Bahamas or Caymans is just a cute soundbite that impresses congressmen and others who need an easy scapegoat for a gullible public. In practice, even when money laundering hops through such places it is almost always directed from OECD countries, and it is almost always from and to those countries.

Fourthly, money laundering takes time - several months for a full cycle. A few days loss is neither here nor there to a money laundering process, and in fact, it may even be marginally beneficial, as the chaos may provide additional cover. Spam OTOH seems to be a cycle of a day or two, so it would be definately impacted by a hurricane.

That's my call! Does anyone know any different?