Non-compliance behavior of de-risking force the EU to enhance anti-money laundering regulation

IF 2 Q2 BUSINESS, FINANCE

Journal of Financial Regulation and Compliance Pub Date : 2021-07-15 DOI:10.1108/JFRC-12-2020-0113

K. Rose

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引用次数: 1

Abstract

Purpose Recent research shows that because of money-laundering risks, there has been an increase in the off-boarding of certain types of corporate clients in the financial sector. This phenomenon known as “de-risking” has been argued to have a negative impact on society, because it increases the possible risk of money laundering. The purpose of this paper is to analyze whether the de-risking strategy of financial institutions results in an expansion of the regulatory framework concerning anti-money laundering focusing on off-boarding of clients and, if so, is there a way to avoid further regulation by changing present behavior. Design/methodology/approach This paper applies functional methods to law and economics to achieve higher efficiency in combating money laundering. Findings In this paper, it is found that the continuing of de-risking by financial institutions because of the avoidance strategy of money-laundering risks will inevitably result in further regulatory demands regarding the off-boarding process of clients. The legal basis for the introduction of further regulatory intervention is that some of the de-risking constitutes a direct contradiction to the aim of the present regulatory framework, making the behavior non-compliant to the regulation. Originality/value There has been very little research concerning de-risking related to money laundering. The present research has focused on the effect on society and not the relationship between the financial institutions and the regulator. This paper raises an important and present problem, as the behavior of the financial institutions constitute a response from the regulator that is contradicting the thoughts behind the behavior of the financial institutions. It is found that the paper is highly relevant if an expansion of regulation is to be hindered.

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去风险的不合规行为迫使欧盟加强反洗钱监管

目的最近的研究表明，由于洗钱风险，金融部门某些类型的企业客户的退出有所增加。这种被称为“去风险”的现象被认为对社会有负面影响，因为它增加了洗钱的可能风险。本文的目的是分析金融机构的去风险策略是否会导致反洗钱监管框架的扩大，重点是客户的退出，如果是这样，是否有办法通过改变目前的行为来避免进一步的监管。设计/方法/方法本文将功能方法应用于法律和经济学，以提高打击洗钱的效率。本文发现，金融机构由于规避洗钱风险的策略而继续降低风险，将不可避免地导致对客户退出过程的进一步监管要求。引入进一步监管干预的法律依据是，一些去风险行为与现行监管框架的目标直接矛盾，使行为不符合监管。独创性/价值关于与洗钱有关的降低风险的研究很少。目前的研究主要集中在对社会的影响，而不是金融机构与监管机构之间的关系。本文提出了一个重要而现实的问题，因为金融机构的行为构成了监管机构的回应，这与金融机构行为背后的思想相矛盾。研究发现，如果要阻碍监管的扩大，这篇论文是高度相关的。

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来源期刊

Journal of Financial Regulation and Compliance BUSINESS, FINANCE-

CiteScore

2.60

自引率

11.10%

发文量

期刊介绍： Since its inception in 1992, the Journal of Financial Regulation and Compliance has provided an authoritative and scholarly platform for international research in financial regulation and compliance. The journal is at the intersection between academic research and the practice of financial regulation, with distinguished past authors including senior regulators, central bankers and even a Prime Minister. Financial crises, predatory practices, internationalization and integration, the increased use of technology and financial innovation are just some of the changes and issues that contemporary financial regulators are grappling with. These challenges and changes hold profound implications for regulation and compliance, ranging from macro-prudential to consumer protection policies. The journal seeks to illuminate these issues, is pluralistic in approach and invites scholarly papers using any appropriate methodology. Accordingly, the journal welcomes submissions from finance, law, economics and interdisciplinary perspectives. A broad spectrum of research styles, sources of information and topics (e.g. banking laws and regulations, stock market and cross border regulation, risk assessment and management, training and competence, competition law, case law, compliance and regulatory updates and guidelines) are appropriate. All submissions are double-blind refereed and judged on academic rigour, originality, quality of exposition and relevance to policy and practice. Once accepted, individual articles are typeset, proofed and published online as the Version of Record within an average of 32 days, so that articles can be downloaded and cited earlier.