2. Present them in a short review.

3. Discuss the problem raised in the text. Tougher Measures Needed to Counter Macroeconomic Effects of Money Laundering

The globalization of the world economy and the growing efficiency of capital markets allow individuals and firms to shift vast amounts of money relatively freely between domestic financial markets and from one country to another. The efficiency of capital markets and their freedom from restrictions on capital movements have also provided criminal elements with an easy means to launder internationally money acquired from illegal activities in particular countries. Although difficult to measure, the magnitude of the sums involved and the extent of the criminal activities that generate this "income" have implications for both the domestic and the international allocation of resources and macroeconomic stability.

Money laundering and measures to counter it have therefore become the focus of intense international attention in recent years.

Money laundering is, by definition, a concealed activity. The "dirty" money that is cycled through the international capital "laundromats" is generated by criminal activities that take place far from the eyes of the authorities. These activities include, in particular, the production and distribution of illegal drugs, as well as theft and embezzlement, insider trading, traffic in nuclear materials, usury, and prostitution. Although it is impossible to measure directly the size of the net financial gains that accrue annually to those who engage in these activities worldwide, the value of the total stock of laundered money is probably much larger than the GDP of many countries.

The concentration of vast sums of money in laundering operations has generated progressively more sophisticated attempts to launder the assets. Laundering transactions now involve a broad range of financial instruments, including derivatives. And the intermediaries have increasingly included such traditional financial institutions as banks and near-banks, brokers and dealers in securities, and foreign exchange dealers, as well as unconventional and parallel financial markets.

This huge money stream may exert an impact on macroeconomy.

At the national level, large financial flows related to money laundering could influence variables such as exchange rates and interest rates. At the international level, capital movements originating in one center can easily spread to others, thus transforming a national problem into a systemic one.

The transparency and soundness of financial markets are key elements in the effective functioning of economies, and money laundering can threaten both. Criminally obtained money can corrupt financial market officials, and the damage can be long-lasting, because the credibility of markets, though quickly lost, takes a long time to be rebuilt.

Although domestic money laundering can often be fought at the national level, an effective solution to the international money laundering problem is only possible at the international level.

Words you may need:

Англiйский варiант	Росiйський варiант	Український варiант
money laundering	отмывание денег	відмивання грошей
counter	противостоять	протистояти
magnitude	размер(ы), масштаб(ы)	розмір(ы), масштаб(ы)
implication	подтекст, смысл	підтекст, значення
concealed activity	тайная деятельность	таємна діяльність
drugs	наркотики	наркотики
theft	кража	крадіжка
embezzlement	растрата	розтрата
traffic (in)	(зд.) торговля (чем-л.)	(зд.) торгівля (чим-не будь)
usury	и ростовщичество	і лихварство
accrue v	увеличиваться, расти, (зд.) поступать	збільшуватися, рости, (зд.) поступати
derivatives n pi	производные ценные бумаги	похідні цінні папери
to exert an impact	оказывать воздействие	надавати дію

Ex. 11. Give extensive answers to these discussion questions:

1. Do rates of exchange influence the external trade of a country?

2. What are the meaning and purpose of Forward Exchange?

3. What are the objectives and methods of Exchange Control?

4. What is "convertibility" as applied to a currency?