Financial Secretary to the Treasury Barbara Roche was addressing Fraud 4 conference which brings together experts working against financial crime from across the world.

Barbara Roche: Financial criminals have moved on

Ms Roche told the conference that they were already seeing their work against financial crime changing.

She said: "International financial criminals are among the most sophisticated operators in the global marketplace.

"Many of today's financial criminals have moved on from the proverbial suitcase full of 'dirty money'.

"Today, they are often at the cutting edge of developments in financial markets and new technology."

Securities, derivatives and insurance products were now all vehicles for fraud and money laundering, she continued.

Ms Roche said: "We see the exploitation of the Internet and electronic money, where money is moved around the world with relative ease and little trace."

The Internet has replaced suitcases of money

Governments and regulators must improve the transparency of financial markets and increase their willingness to share information between different countries, law enforcement authorities and financial regulators.

Financial crime and corruption could cause the same disruption to world markets as the Asian economic crisis, Ms Roche continued.

She told the conference: "None of you will need reminding of the way the effects of the recent Asian economic crisis rippled around the world.

"Our exposure to financial crime and corruption has a similar potential to disrupt our economic prosperity."

The City of London was particularly vulnerable, delegates heard.

Ms Roche said: "Our standards of law and regulation are among the strongest in the world.