DESIGNING THE ANTI-MONEY LAUNDERING SUPERVISOR: THEORY, INSTITUTIONS AND EMPIRICS

D. Bartolozzi, M. Gara, D.J. Marchetti and Donato Masciandaro ()

No 19126, BAFFI CAREFIN Working Papers from BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy

Abstract: Using a unique data set, this paper studies the governance of anti-money laundering supervisors known as Financial Intelligence Units (FIUs). Starting from a theoretical framework that highlights four key properties of FIU governance – financial powers, law enforcement features, independence and accountability – we build the first quantitative index of FIU governance. The proposed metrics are then applied in an analysis of 71 countries that explores the drivers of FIU governance properties. Our results show that FIUs’ financial powers tend to be weaker in bank-based economies and stronger in countries with more affiliations with international anti-money laundering organizations. FIU independence and FIU accountability are stronger in countries with higher-quality governments and less opacity in the fiscal and legal systems. With regards to the nexus between country fundamentals and our overall FIU Governance Index, the index generally appears stronger for richer and more transparent countries. It is also stronger for countries with civil (rather than common) law. Finally, given the distinction between administrative FIUs and law enforcement FIUs, we find that overall FIU governance as well as independence and accountability are all weaker in countries with law enforcement FIUs.

Keywords: Money laundering; Financial Supervision; Anti-Money Laundering Regulation (search for similar items in EconPapers)
JEL-codes: E26 G28 H11 L51 (search for similar items in EconPapers)
Pages: 28
Date: 2019
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://repec.unibocconi.it/baffic/baf/papers/cbafwp19126.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:baf:cbafwp:cbafwp19126

Access Statistics for this paper

More papers in BAFFI CAREFIN Working Papers from BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy Via Röntgen, 1 - 20136 Milano - Italy. Contact information at EDIRC.
Bibliographic data for series maintained by Michela Pozzi ().