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How Does Money Laundering Affect Business?

The integrity of the banking and financial services and the market place depends heavily on the perception that it functions within a frame work of high legal, professional and ethical standards .A repletion for integrity is one most valuable asset of a financial institution.

If funds from a criminal activity can be easily processed through a particular institution either because its employees or director s have been bribed or because the institution turns a blind eye to the criminal nature of such funds –the institution could be drawn in to active complicity with criminals and become part of the criminal network itself .Evidence of such complicity will have damaging effect on the attitudes of other financial intermediaries and of regulatory authorities as well as ordinary customers. The Bank of Credit and Commerce (BCC) scandal in the earl 90’s bears testimony on such sentiments.


As for the potential negative macro economic consequences of unchecked money laundering, the International Monetary Fund ha sited inexplicable changes in financial transactions and increased volatility o f international capital flow and exchange rates due to unanticipated cross border asset transfers.