In this episode of Upstream, Erik Torenberg interviews Patrick McKenzie (patio11) about the intricacies of the financial system, focusing on banking, money laundering, and regulatory compliance. They discuss several of Patrick’s essays from Bits About Money.
Patrick discusses the three stages of money laundering - placement, layering, and integration - and how the financial system has been deputized to act as law enforcement. The conversation touches on the unintended consequences of strict regulations, including their impact on economic growth and financial inclusion.
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LINKS:
Patrick’s Newsletter: https://www.bitsaboutmoney.com/
Seeing Like a Bank https://www.bitsaboutmoney.com/archive/seeing-like-a-bank/
KYC and AMI: https://www.bitsaboutmoney.com/archive/kyc-and-aml-beyond-the-acronyms/
Money Laundering and AML Compliance: https://www.bitsaboutmoney.com/archive/money-laundering-and-aml-compliance/
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FOLLOW ON X/TWITTER:
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TIMESTAMPS:
(00:00) Intro
(01:02) Discussing 'Seeing Like a State' and big tech
(03:10) Big tech's competence and failures
(07:20) AI and centralized systems
(09:23) Crypto vs. AI: political implications
(10:58) Sponsors: Dealcraft | Fundrise
(13:03) Banking systems and customer service
(14:28) Structural issues in banking
(22:41) Future of banking and customer service
(25:14) Regulatory risks and compliance in banking
(28:21) The harsh realities of financial decisions
(29:05) Geopolitical conflicts and financial institutions
(29:53) The role of banks in delivering bad news
(31:32) Sponsors: Alts | Squad
(33:41) Understanding KYC and AML regulations
(37:35) Complexities of money laundering
(44:42) The burden of compliance on financial institutions
(51:14) Balancing financial services and crime interdiction
(53:52) Wrap