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Money Laundering - Factor Of Destabilization, Contamination And Growth Of The Republic Of Moldova?S Banking Sector Systemic Risk

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  • Vadim LOPOTENCO

    (The Academy of Economic Studies of Moldova, Republic of Moldova)

Abstract

The success of criminal activity is dependent on the possibility to launder the money received by the illegal way through the banking system. The use of banking systems for money laundering leads to the undermining of individual banking institutions and, ultimately, of the entire banking system. At the same time, the increased integration of world banking systems and the removal of barriers to the free movement of capital have increased the ease with which illegal money can be launder and complicate the money tracking process. At the same time money laundering is a major factor in the contamination of the entire economy: this phenomenon can erode the integrity of a country's banking institutions. Banks, as providers of a wide range of fund and credit transfer services, can be used in all phases of money laundering, placement, stratification and integration. Electronic funds transfer systems allow for rapid transfer of funds between accounts under different names and jurisdictions. In this way, we will analyze the influence of money laundering on the systemic risk and on the stability of the banking system in the Republic of Moldova.

Suggested Citation

  • Vadim LOPOTENCO, 2018. "Money Laundering - Factor Of Destabilization, Contamination And Growth Of The Republic Of Moldova?S Banking Sector Systemic Risk," Contemporary Economy Journal, Constantin Brancoveanu University, vol. 3(4), pages 139-147.
    • Handle: RePEc:brc:brccej:v:3:y:2018:i:4:p:139-147
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    References listed on IDEAS

    as
    1. Mr. R. B. Johnston & Miss Liliana B Schumacher & Ms. Jingqing Chai, 2000. "Assessing Financial System Vulnerabilities," IMF Working Papers 2000/076, International Monetary Fund.
    2. Helmut Elsinger & Alfred Lehar & Martin Summer, 2006. "Risk Assessment for Banking Systems," Management Science, INFORMS, vol. 52(9), pages 1301-1314, September.
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    More about this item

    Keywords

    money laundering; banking system; systemic risk; destabilization;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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