Financial Warfare.

• Author: Abrahamson, James L.

www.fpri.org/enotes/200709.bracken.financialwarfare.html

By Professor Paul Bracken (Yale University)

In this article written for the Fall 2007 edition of Orbis and reprinted on-line by the Foreign Policy Research Institute, Paul Bracken, Professor of Management and Political Science at Yale, explores the usefulness of what he calls financial warfare directed at, for example, "the overseas bank accounts of North Korean, Iranian, and Russian companies involved in illicit activities such as nuclear and conventional weapons proliferation."

Even the appearance of a threat to a bank's or a firm's accounts, Bracken argues, can prompt the movement of money to safer banks and safer countries, thereby preventing the targeted firms and individuals from using the accounts to finance their international activities. In regard to Iran's Bank Sederat, for example, major foreign banks followed the U. S. lead for fear of the public learning that they had "ties" with Iran's nuclear program through Bank Sederat.

With daily capital flows through the Clearinghouse Interbank Payments System averaging $1.5 trillion dollars and the total international movement of capital likely reaching $2.5 trillion per day, financial warfare seemingly has a huge...