The Serious Fraud Office says that the London banking system is a magnet for money launderers, and banks are not doing enough to stop them.
The SFO has 85 cases under investigation or prosecution, the largest number in its 12 years of existence.
It says that most banks do not want to report fraud as it shows weaknesses in their processes.
SFO director Rosalind Wright says that UK banks are the conduit for the proceeds of drug trafficing, prostitution and illicit arms trafficking. “The problem is very large and growing.”