Subject The article discusses the assessment of risk of money laundering and financing of terrorism (ML/FT risk) in the Russian banking sector based on risk level assessment in systemically important banks of the Russian Federation. It presents the results of testing this approach with regard to making risk profiles of Russian systemically important banks that reflect an indirect assessment of ML/FT risk level inherent in the banks in 2014. Objectives The purpose of the study is to offer directions of developing the methodological approaches to assessment of risk intrinsic in money laundering and terrorist financing in the Russian banking sector. Methods The study employs methods of statistical analysis and techniques for ranking creation. Results I developed an original approach to ML/FT risk assessment at the level of the banking sector; performed a partial testing of the offered approach. Based on the testing results, I formulated recommendations for ML/FT risk mitigation in Russian banks. Conclusions The paper distinguishes three types of risk profiles of Russian systemically significant banks: with domination of one risk, domination of two risks, and without emphasis on a certain risk; reveals two zones of vulnerability of Russian systemically important credit institutions, i.e. areas of interrelations of country risk and ML/FT risk, reputation risk and ML/FT risk; and identifies the lack of banks' vulnerability zone in the interrelation of operational risk and ML/FT risk.
Keywords: risk, money laundering, terrorist financing, systemically important banks, country risk
References:
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