Why are shell banks called "Shell" banks?
I read somewhere it was because of their origin in the Caribbeans but I don't see the link.
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It has nothing to do with the Caribbeans...
A "shell" in nature is just a casing - it has no internal substance, but instead covers (or hides) the actual substance or organism. Think of an egg shell or a conch shell - they have no meaning other than to contain or hide something inside it.
A shell bank is a bank that has no physical presence in any country. It is an empty entity. They usually exist only to facilitate money laundering or other nefarious activities for some other entity.
A "shell corporation" or "shell company" is a similar concept - they exist only to hide or protect the actual company behind it, typically to avoid taxes.
Shell bank means “a bank that has no physical presence in the country in which it is incorporated and licensed, and which is unaffiliated with a regulated financial group that is subject to effective consolidated supervision.
Wolfsberg Anti-Money Laundering Principles for Correspondent Banking by The Wolfsberg Group 2014,Wolfsberg Correspondent Banking Principles