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When will the Bank of New York shake off the bad decisions of the 1990s?

It was as bank called Republic and it came up for sale. It had a lot of Russian business and quite a lot involving Iran and the super-rich before it was normal to be suspicious of the super-rich who had made their money out of the public eye. It was December 1999 and Edward Safra, the owner of Republic (he described himself as Chairman but he was almost the only significant decision maker) was found in his flat in Monaco. During a fire, he had locked himself in a bathroom and died of smoke inhalation in a bathroom with a nurse. He had shot himself. Twice. Or one of his nurses set the fire, depending on which version of events one believes. Whatever, the deal to sell Republic to Bank of New York went ahead and mayhem ensued. Now there's a new chapter to the story.


Safra was such a well known figure that a year after his death, there was an article in Vanity Fair magazine. He was an astonishingly well connected banker to criminal gangs. In an attempt to save his bank, his wealth and his freedom, he had done a deal with the USA's FBI to assist them in bringing an action against some Russian gangsters. Republic would not be prosecuted for money laundering but, it has been hinted, Safra was told to sell up or close the bank.

Enter the Bank of New York. In the mid-to-late 1990s, US banks were in an expansionist phase and private banking was seen as an excellent move. They should have known better: the Manhattan District Attorney's office was on a crusade against private banking which, using a statement by a manager from Citbank, it redefined as, essentially, little more than a deposit box for money that no one asked questions about.

World Money Lau...