Why Do Big Banks Launder Money?

Mexican and Colombian drug cartels, shady foreign officials, sanctioned regimes such as Iran and Sudan—those are just some of the sources of income for the global banking industry. Wachovia, HSBC, Standard Chartered, and Deutsche Bank have all accepted fines for laundering money from illegal sources. The question is: why take the risk? One would think that even with extraordinary pressure coming from shareholders and fierce competition between corporate rivals, surely taking such money must be an unusual and misguided step.