BCCI: Evolution of International Banking BCCI was a key international bank founded by Agha Hassan Abedi and Swaleh Naqvi, his assistant, in 1972 (APFN 1). The bank was headquartered in London and Karachi, though registered in Luxemburg, and had 400 branches spread across seventy-eight countries in Africa, Europe, Asia, and the Americas (Markham 174). By 1991, BCCI had amassed assets in excess of twenty billion U.S. dollars, and was, by this measurement, the seventh largest bank in the world (Markham 174). Pakistani ISI transformed BCCI into the biggest ever clandestine money network, which resulted in the ignoble closure of the bank's worldwide operations in a scam that illustrated "the disastrous effects of deficient supervision of the international banking system" (Laifer 467).

Pre-BCCI

Concerns regarding the international banking standards started to be raised in 1974, after the failure of prominent banking institutions in the U.S. And Europe (Markham 174). Each of the affected nations' central banks sought to address this concern by tightening banking regulations within their jurisdictions (Laifer 469). In order to achieve increased coordination, twelve central bank governors...

The Basle Concordant, setting out the responsibility for the scrutiny of international banks as being of the host as well as the home authority, was established in the same year (Laifer 469).
The 1975 Concordant, however, failed to effectively address key concerns in the Banco Ambrosiano in Italy, and was revised in 1983 to include two regulatory elements; the dual-key approach and the home country's primary responsibility which collectively gave rise to the consolidated supervision principle (Laifer 469). The FDIC regulated bank activities in the U.S.

The Basle group seized control of the BCCI on the 5th of July, 1991 (Markham 174). Investigations revealed BCCI's large-scale involvement in the illegal nuclear technology trade, arms trafficking, illegal migration, smuggling, tax evasion and the management of prostitution (Markham 175). The bank facilitated these, together with its money laundering and illegal purchasing activities by bribing influential government officials…