Ban high denomination notes to tackle crime, says ex-bank boss

Global central banks should stop issuing notes of high denomination, such as the £50, $100 and €500 notes, in order to tackle crime, according to a banking sector veteran.

In a new report, Peter Sands, former chief executive of Standard Chartered, claims banknotes of high denomination are favoured by criminals and tax evaders.

Sands' report said that high denomination money flows exceed $2 trillion (£1.4 trillion) per annum with terrorists and drug lords being among the biggest users of such notes.

Controversially, the former banker calls for G20 countries to target the cash itself as another avenue to dent the flow of criminal proceeds.

“High-value notes play little role in the functioning of the legitimate economy, yet a crucial role in the underground economy," he added. "The irony is that they are provided to criminals by the state."

Banning the notes would not stop crime, but it would make hiding transactions more costly and more difficult, Sands said further.

The European Commission is already investigating the use of €500 notes while UK banks stopped handling €500 notes in 2010 after an inquiry found they were predominantly being used by criminals.