Vulnerabilities of financial institutions and households to the risk of money laundering and terrorist financing: An analysis of mutual relations and implications in terms of financial security
Importance The article presents the outcome of a research into kinds of vulnerability of financial institutions and households to the risk of money laundering and terrorist financing. We also examine and complement a matrix depicting the risk implications per type of implication (economic and structural) and influence (economy, financial institutions, households). Objectives The research analyzes how financial institutions and households convey their vulnerability to the risk of money laundering and terrorist financing in terms of its areas and forms, and determines how this risk may impact households, financial system and economy as a whole. Methods The research is based on methodological approaches of the Financial Action Task Force (FATF) to identifying the risk of money laundering and terrorist financing, and its components at the global and national levels. Results We determined areas of financial institutions and households' vulnerabilities to the risk of money laundering and terrorist financing, and their respective forms through their evaluation. We complemented the matrix describing implications of the risk of money laundering and terrorist financing with a new level, i.e. financial institutions. The article indicates economic and structural implications of the risk. Conclusions and Relevance Financial institutions and households convey their vulnerabilities to the risk of money laundering and terrorist financing in various forms. The mechanism resembles the contagion effect, rather than the risk allocation. When vulnerabilities are conveyed, the contagion effect is extrapolated at the level of implications arising from the money laundering and terrorist financing risk, which have economic and structural effects on various levels of the economic system.
Nivorozhkina L.I. Sberegatel'noe i kreditnoe povedenie domokhozyaistv: opyt empiricheskogo issledovaniya.V kn: Nauchnye ocherki vedushchikh uchenykh RGEU (RINKh) [Saving and credit tendencies of households: practices of empirical studies. In: Scientific essays on the leading scholars of RSUE]. Rostov-on-Don, Rostov State University of Economics Publ., 2014, pp. 126–182.
Nivorozhkina L.I., Yaraskhanova E.U. [An impact of unaccounted income of households on the inequality level and structure]. Statistika v ekonomicheskikh i gumanitarnykh naukakh: materialy mezhdunarodnoi nauchno-prakticheskoi konferentsii [Proc. Sci. Conf. Statistics in Economic Sciences and Humanities]. St. Petersburg, Nestor-Istoriya Publ., 2016.
Nivorozhkina L.I., Toropova T.V., Batashev R.V. [Income of the Russian households. Why do costs exceed income?]. Uchet i statistika = Accounting and Statistics, 2015, no. 4, pp. 75–83. (In Russ.)
Frolova E.E. [Shadow economy as a special aspect of modern monetary circulation]. Itogi i perspektivy nauchnykh issledovanii = Results and Prospects of Scientific Researches, 2016, no. 3, pp. 80–87. (In Russ.)
Alifanova E.N., Evlakhova Yu.S. [Identification of areas exposed and vulnerable to the risk of money laundering]. Finansovye issledovaniya = Financial Research, 2015, no. 3, pp. 42–52. (In Russ.)
Gamonenko S.S. [Assessing the risk of money laundering and terrorist financing as a priority goal of financial monitoring]. Vestnik Moskovskogo universiteta MVD Rossii = Bulletin of Moscow University of the Ministry of Internal Affairs of Russia, 2015, no. 9, pp. 237–242. (In Russ.)
Pavlova D.A. [New financial pyramids and issues of financial literacy]. Vittevskie chteniya: materialy XIII mezhdunarodnoi mezhvuzovskoi nauchno-prakticheskoi konferentsii [Proc. Int. Sci. Conf. The Witte Readings]. Moscow, Moscow Banking Institute Publ., 2012, pp. 275–277.
Anisimova Yu.A. [Financial bubbles and financial pyramids in the contemporary world]. Vestnik Ivanovskogo gosudarstvennogo universiteta. Ser. Ekonomika = Bulletin of Ivanovo State University. Series Economics, 2015, no. 3-4, pp. 53–57. (In Russ.)
Davtyan A.A., Gabrielyan N.A. [Financial pyramids: a new wave]. Aktual'nye voprosy ekonomicheskikh nauk = Current Issues of Economic Sciences, 2012, no. 28, pp. 72–76. (In Russ.)
Aleksandrova V.A. [Financial pyramids. Models of cash flows]. Science Time, 2015, no. 4, pp. 24–29.
Pozdyshev V.A. [Banking regulations in 2015–2016: key changes and outlook]. Den'gi i kredit=Money and Credit, 2015, no. 12, pp. 3–8. (In Russ.)
Simanovskii A.Yu. [Banking regulation: re-evolution]. Den'gi i kredit=Money and Credit, 2014, no. 1, pp. 44–46. (In Russ.)
Ignat'ev I.O., Logvinenko E.M. [Illegal transactions with foreign currency as a type of illegal banking]. Nauchnye trudy SWORLD = Scientific Proceedings of SWORLD, 2012, vol. 18, no. 2, pp. 69–71. (In Russ.)
Smagorinskii B.P., Shchelkonogov A.V. [Some issues of the illegal cash withdrawal process through accounts of sham entities as a type of illegal banking]. Vestnik Volgogradskoi akademii MVD Rossii = Bulletin of Volgograd Academy of Russian Internal Affairs Ministry, 2015, no. 2, pp. 107–122. (In Russ.)
Adamov A.A. [The concept and contents of illegal cash drawing in the Russian Federation]. Uchenye zapiski Rossiiskogo gosudarstvennogo sotsial'nogo universiteta = Scientific Notes of Russian State Social University, 2012, no. 2, pp. 58–63. (In Russ.)
Aparyshev I.V. [Securities market as one of the most vulnerable sectors in terms of illegal financial operations]. Finansovaya bezopasnost' = Financial Security, 2014, no. 7, pp. 44–49. (In Russ.)
Bobrysheva G.V. [Financial monitoring as a part of the State control]. Gosudarstvennaya sluzhba = Public Service, 2014, no. 1, pp. 37–39. (In Russ.)
Zueva A.S. [Legalization of illegal income in the securities market]. Yuridicheskaya nauka: istoriya i sovremennost' = Legal Science: History and the Presence, 2012, no. 9, pp. 94–106. (In Russ.)
Prilutskii A.M. [The concept of pawnshop and principal requirements to pawnshop activities]. Rossiiskaya nauka i obrazovanie segodnya: problemy i perspektivy, 2015, no. 1, pp. 69–72. (In Russ.) Available at: Link.
Dirkova E.Yu. [Specifics of accounting in pawnshops]. Nalogovaya politika i praktika = Tax Policy and Practice, 2012, no. 5, pp. 56–60.
Sharoshchenko I.V., Glotov K.V. Ekonomicheskie posledstviya otmyvaniya deneg v Rossii. V kn: Tamozhennoe delo i sotsial'no-ekonomicheskie nauki [Economic implications of money laundering in Russia. In: Customs and socio-economic sciences]. Vladivostok, Russian Customs Academy Publ., 2014, pp. 186–192.
