The Second Front: Banks

Not since the Depression has the US financial system been forced to prepare for such changes as those demanded by a bill racing toward the president's desk.

The bill's purpose - choking off the flow of money to terrorists worldwide - will beef up US efforts on its second war front. Once implemented, the new anti-money-laundering law will demand both sacrifice (mainly by banks and their well-monied customers) and close scrutiny by public and press.

Like the military front in Afghanistan, this law will raise many questions about its effectiveness and its side effects. (See story, page 2.)

The test of the law's effectiveness will come in President Bush's willingness to close off access to the US financial system to those nations - perhaps even oil giant Saudi Arabia - that allow their banks to safeguard money for terrorists.

That's the ultimate bloodless weapon for the US. Few banks doing international business can avoid using American institutions.

Mr. Bush may face a tough choice if some nations don't cooperate, especially if they are now members of the coalition against global terrorism. Tracking the relatively small sums that terrorists need has proven difficult up to now. The amount of money used for the Sept. 11 attacks could have fit into the false bottoms of several suitcases. US financial officials will need to be as tough and relentless as US military personnel in stopping such money-smuggling.

The US needs allies for its financial war, just as it needs them for its military war. Germany, which appears to have been a hub for the Al Qaeda attack on the US, has cooperated well in recent weeks in trying to track such money flows.

But what other nations still are not cooperating? Is Saudi Arabia, for instance, closing down the Islamic charities that are merely fronts for terrorist fundraising? US officials might want to let the American public know.