 The impact of the Fourth Anti-Money Laundering Directive on the valuation of EU banksArjan Premti, Mohammad Jafarinejad and Henry Balani Research in International Business and Finance, 2021, vol. 57, issue C Abstract: Anti-money laundering regulations have costs and benefits for banks. To better understand how these regulations affect banks, we study the valuation effects of the Fourth Anti-Money Laundering Directive (4AMLD) on a sample of European banks. First, using eight significant 4AMLD-related events between the initial announcement (February 5, 2013) and the final enactment (June 26, 2015), we show that the 4AMLD had a positive valuation effect on European banks and helped reduce their systematic risk. Then, using a cross-sectional model, we find that the positive valuation effect was higher for riskier, larger, and more profitable banks with more non-traditional revenue streams, as well as banks operating in rich countries, countries with less effective corporate governance, and countries with higher perception of corruption. These findings provide a better understanding of how anti-money laundering regulations affect banks in order to assist regulators in shaping future policies, as well as bank managers and investors in making better financial and investment decisions. Keywords: AMLD; Banking; Regulations; Money laundering (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:57:y:2021:i:c:s0275531921000180 DOI: 10.1016/j.ribaf.2021.101397 Access Statistics for this article Research in International Business and Finance is currently edited by T. Lagoarde Segot More articles in Research in International Business and Finance from Elsevier |
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