Compliance landscape in central and eastern Europe – the case of Hungary

Levente Kovács and Sandor David

Journal of Money Laundering Control, 2017, vol. 20, issue 4, 325-333

Abstract: Purpose - This paper aims to explore how the understanding of the concept of compliance as its own risk category and the role of compliance as a separate internal banking function developed during the central and eastern European (CEE) region’s restoration of the banking systems, both parallel to and as a part of their transition process from their centrally planned economies to market economies, with special focus on the case of Hungary. Design/methodology/approach - The paper discusses the transition within CEE and the reconstruction of their banking systems, including that of money and the capital market and the law-abidingness of the banking sector, the role of its reputation, compliance and customer relationships, compliance after 2005, the Bank of International Settlement principles and their implementation, a Hungarian compliance survey conducted in 2009 and future challenges in the field of compliance. Findings - There is still not a globally or continentally accepted “best” practice in the field of compliance. It is under these circumstances that banking systems must face the challenges of this new epoch of increasing migration and cybercrime. Originality/value - This paper presents the development of compliance in CEE, with special focus on Hungary. The article was written by employees of the Hungarian Banking Association, put together with the help of the vast experience they gained throughout their careers in the banking sector.

Keywords: Terrorist financing; Compliance; Compliance function in banks; Ethics in banks; G29 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jmlcpp:jmlc-11-2016-0046

DOI: 10.1108/JMLC-11-2016-0046

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