Reframing Financial Sector Identity: Options For Reducing Mexican Drug Cartel Economic Power   [open pdf - 1MB]

From the thesis abstract: "Recent analyses of Mexican drug cartels' societal control and challenge to security reveal an insurgency in the making. More dangerous is the fact that the cartels are the most successful transnational criminal organization in history. Their strength comes not only from the ability to inflict harm or deliver tons of drugs. This paper argues their greatest source of power is monetary. Analysis shows Mexican drug cartels have a mature economic model that leverages the informal economy and includes a broad base of business ownership, and depth in assets beyond drug trade. Of greater concern, the cartels have a wide span of control in banking and finance. A proper understanding of these financial networks is needed because both the U.S. and Mexico are failing to control the fiscal batttlespace. The paper reveals Mexican laws and regulations still lack basic international standards and also highlights that banking controls in both countries are vulnerable. Finally, the paper argues that renewed government and private sector partnership and investment are needed to replace the drug cartel's financial culture with a new identity that permeates the banking sector. Without fundamental cultural change and resolution of gaps in regulation, the cartel business enterprise will continue to enable security challenges on both sides of the border."

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