U.S. Government: A Strong Economy Requires Effective Security Measures

Tuesday, December 8th, 2009

Sometimes a severe catastrophe has to happen before authorities and leaders realize that something has to change. The U.S. government now realizes safeguarding the nation cannot be taken for granted - it is a pre-requisite for a strong economy.

After 9/11 stiffer and more daring banking laws and regulations have been imposed. Most are designed to monitor transactions and alert the government of financial transactions which may be related to, or intended for, terroristic activities.

One such act, The Money Laundering Act, came in to prominence only after the September 11 terrorist attack. This banking Law requires financial institutions to identify and report transactions of suspicious nature to the financial intelligence unit.

Perspectives Vary by Country

The financial institutions protect the privacy of their customers but they are also required to file a Suspicious Activity Report (SAR). A SAR alerts a US agency called Financial Crimes Enforcement Network (FinCEN) of possible terrorist funding or other unlawfully related financial transaction.

Some other countries impose a different approach; in the US a bank deposit of $10,000 will require a bank to file a Currency Transaction Report (CTR). Some European nations will file a CTR for deposits of EUR 15,000 and above. A bank in the US can file a SAR if they suspect possible money laundering but in Switzerland they can only file a SAR if it was already proven.

A Suspicious Bank Account

A SAR is only required if an account is suspected to fund any unlawful activity. A CTR on the other hand is required for all bank transactions involving $10,000 and above. Even if a regular bank customer withdraws $10,000, a CTR has to be filed for this. However, if a customer deposits several hundred thousand dollars, then withdraws and deposits thousands of dollars regularly, a SAR has to be filed.

This banking law may turn off customers from using bank services - which, in turn, may lead to fewer bank deposits. Banks will then have less money to fund loans.

Nevertheless, these regulations can prevent catastrophic events from happening again. Consumer confidence has dwindled and the stock market suffered from the 9/11 attack. No one with rational and normal thinking would want that to happen again.

Let us not wait for something that big and devastating to happen before taking the steps necessary to protect ourselves. Changes have to be made for the greater good. Security is truly an investment for a strong and stable economy.

Tags: bank regulations, banking law, national security
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