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Article
Publication date: 8 March 2022

Fabian Maximilian Johannes Teichmann and Chiara Wittmann

The purpose of this paper is to illustrate threefold how hawala banking poses a problem for Swiss banks implementing anti-money laundering (AML) and anti-terrorist financing (ATF…

Abstract

Purpose

The purpose of this paper is to illustrate threefold how hawala banking poses a problem for Swiss banks implementing anti-money laundering (AML) and anti-terrorist financing (ATF) policies as a fulfilment of Switzerland’s UN commitment.

Design/methodology/approach

The first author interviewed compliance officers and suspected criminals on hawala banking mechanisms. The authors formally recorded interviews with compliance officers, but interviews with suspected criminals were not recorded to maximize their potential forthrightness. In total, the authors conducted 70 formal interviews and developed a questionnaire based on this, which was sent to 200 compliance officers. The authors subjected the interviews to qualitative analysis and developed a system of categories that the authors assessed by means of triangulation. By substantiating proposed theoretical challenges with empirical findings, future recommendations for regulatory procedures are based on analytical evidence.

Findings

This study finds that hawala presents significant challenges for AML and ATF policies. Whilst it is possible to mediate the first two challenges laid out herein, it is the third hurdle that proves insurmountable. Ultimately, tolerating hawala banking passively counteracts any active effort made by implementing AML and ATF policies.

Originality/value

Whilst the existing literature sufficiently connects hawala banking to terrorist financing, this study details how existing compliance measures are circumvented and the implications on the perceived commitment of Switzerland against financial crime.

Details

Journal of Money Laundering Control, vol. 26 no. 3
Type: Research Article
ISSN: 1368-5201

Keywords

Article
Publication date: 31 October 2023

Grzegorz Zasuwa and Grzegorz Wesołowski

This study examines how potentially irresponsible banking operations affect organisational reputation. A moderated mediation model is applied to explain how major aspects of…

Abstract

Purpose

This study examines how potentially irresponsible banking operations affect organisational reputation. A moderated mediation model is applied to explain how major aspects of social irresponsibility affect the relationship between consumer awareness of allegedly irresponsible operations, blame and bank reputation. The empirical context is the Swiss franc mortgage crisis that affected the banking industry in most Central and Eastern European countries.

Design/methodology/approach

The research study uses data collected from a large survey (N = 1,000) conducted among Polish bank consumers, including those with mortgage loans in Swiss francs. To test the proposed model, the authors use Hayes' process macro.

Findings

The findings show that blame fully mediates the effects of corporate social irresponsibility (CSI) awareness on organisational reputation. Three facets of social irresponsibility moderate this relationship. Specifically, the perceived harm and intentionality of corporate culprits cause people to be more likely to blame a bank for the difficulties posed by indebted consumers. At the same time, the perceived complicity of consumers in misselling a mortgage reduces the level of blame and its subsequent adverse effects on bank reputation.

Originality/value

Although a strong reputation is crucial in the financial industry, few studies have attempted to address reputational risk from a consumer perspective. This study helps to understand how potentially irresponsible selling of a financial product can adversely affect a bank's reputation.

Details

International Journal of Bank Marketing, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0265-2323

Keywords

Article
Publication date: 26 September 2023

Priyanka Goyal and Pooja Soni

The present study aims to comprehensively examine the impact of the Union Bank of Switzerland (UBS) takeover of Credit Suisse on the banking and financial services sector in the…

Abstract

Purpose

The present study aims to comprehensively examine the impact of the Union Bank of Switzerland (UBS) takeover of Credit Suisse on the banking and financial services sector in the Indian stock market. To fully comprehend the impact of the event, the study separately investigates the response of private sector banks, public sector banks, overall banking companies and financial services companies to the takeover of the second-largest financial institution in Switzerland.

Design/methodology/approach

The study employs event study methodology, using the market model, to analyze the event's impact on Indian banking and financial services sector stocks. The data consists of daily closing prices of companies included in the Nifty Private Bank Index, Nifty PSU Bank Index, Nifty Bank Index and Nifty Financial Services Index from the National Stock Exchange (NSE). Furthermore, cross-sectional regression analysis has been conducted to explore the factors that drive abnormal returns.

Findings

The empirical findings of the study suggest the event had a heterogeneous impact on the stock prices of Indian banks and financial services companies. While public sector banks experienced a significant negative impact on select days within the event window, the overall Indian banking sector and financial services companies also witnessed notable declines. In contrast, Indian private sector banks were relatively resilient, exhibiting minimal effects. However, the cumulative effect is found to be insignificant for all four categories across different event windows. The study also observed that the cumulative abnormal returns (CARs) were significantly influenced by certain variables during different event windows.

Originality/value

To the best of the authors' knowledge, the present study is the earliest attempt that investigates the impact of the UBS takeover of Credit Suisse on the Indian banking and financial services sector using event study methodology and cross-sectional regression model.

Details

Journal of Economic Studies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0144-3585

Keywords

Book part
Publication date: 10 May 2023

Samridhi Tanwar and Aakash Khindri

Purpose: The global financial services business has been transformed by Blockchain technology, making it safer and more efficient. Keeping this fact in mind, the authors will…

Abstract

Purpose: The global financial services business has been transformed by Blockchain technology, making it safer and more efficient. Keeping this fact in mind, the authors will study how Blockchain technology improves financial services, including the banking and insurance sectors. The risks and roadblocks in the path of Blockchain adoption in financial services will also be discussed.

Need of the Study: Blockchain operates without any central authority. Instead, it could be understood as a transaction-containing ledger shared among many users. The adoption of Blockchain is gaining traction in every field, but still, a sense of doubt about its reliability can be observed among ordinary people. Thus, an investigation of the operational intricacies and technicalities could assist in clarifying the confusion associated with this technology.

Methodology: To achieve the aims mentioned above, an exploratory research design involving a review of the secondary data linked with the implementation and impact of Blockchain technology in the domain of finance is conducted.

Findings: The mode of operation of Blockchain technology is thoroughly explained, along with the influence it has exercised in the financial domain in recent years.

Practical Implications: The findings of this study can mainly assist global investors and users worldwide by clarifying the concept and operations of Blockchain technology. Also, it could guide future studies assessing the role of Blockchain in the financial domain.

Details

Contemporary Studies of Risks in Emerging Technology, Part A
Type: Book
ISBN: 978-1-80455-563-7

Keywords

Article
Publication date: 9 December 2022

Md. Zahurul Haq

This paper aims to examine the probable effect of the General Data Protection Regulation of the European Union on the transfer of financial intelligence to a third country without…

Abstract

Purpose

This paper aims to examine the probable effect of the General Data Protection Regulation of the European Union on the transfer of financial intelligence to a third country without an adequacy decision.

Design/methodology/approach

This is an analytical study of the financial intelligence exchange mechanisms between the Bangladesh Financial Intelligence Unit (BFIU) and its foreign counterparts. The research analyses the key challenges this national agency faces in using the Egmont Group membership to import financial intelligence from jurisdictions with a superior data protection regime.

Findings

Membership in the Egmont Group of Financial Intelligence Units does not guarantee unrestricted international intelligence exchange. Existing data protection regulations in Bangladesh are inadequate. This may forbid the transfer of the financial intelligence linked to European Union (EU) data subjects to Bangladesh.

Research limitations/implications

This paper does not cover a thorough discussion on any specific alternative tools for data transfer from the EU to a third country except for “appropriate safeguards” options.

Practical implications

The results of this study will help understand the existing legal and institutional limitations that may prevent intelligence exchange between the BFIU and its EU counterparts.

Originality/value

The study helps ascertain the legislative reform necessary in Bangladesh, a third country, to facilitate the transfer of financial intelligence from the EU.

Details

Journal of Money Laundering Control, vol. 27 no. 1
Type: Research Article
ISSN: 1368-5201

Keywords

Content available
Book part
Publication date: 11 July 2023

Abstract

Details

Collective Entrepreneurship in the Contemporary European Services Industries: A Long Term Approach
Type: Book
ISBN: 978-1-80117-950-8

Expert briefing
Publication date: 17 August 2023

Banks had hoped to share with borrowers the at-least USD5bn cost of making provision for Swiss franc mortgages. These mortgages were common prior to 2008, due to low interest…

Details

DOI: 10.1108/OXAN-DB281287

ISSN: 2633-304X

Keywords

Geographic
Topical
Article
Publication date: 24 July 2023

Aline Renda and Stefano Caneppele

Criminals have quickly discovered the advantage of crypto assets, with its pseudo-anonymity, untraceability and the ability to freely exchange crypto assets across borders, which…

Abstract

Purpose

Criminals have quickly discovered the advantage of crypto assets, with its pseudo-anonymity, untraceability and the ability to freely exchange crypto assets across borders, which makes it an ideal tool for money laundering activities. Switzerland has a technology-neutral framework, and crypto assets are regulated by the existing anti-money laundering (AML) legislation. The purpose of this paper is to gain insights into the industry adoption of measurements to prevent money laundering through crypto assets and if they are compliant with national and international AML regulations.

Design/methodology/approach

Semi-structured expert interviews were conducted with participants having expertise in compliance, AML and crypto assets with focus on Switzerland. The interviews were analyzed using the thematic analysis.

Findings

The experts have a general consensus that Switzerland is a pioneer when it comes to regulating crypto assets. It is perceived that legislations are released without industry consultation and that AML processes for fiat transactions also work for crypto assets, which is not the case. The results show that the industry wants a consortium to fight money laundering in crypto assets in Switzerland. The current measures to identify money laundering are not optimal, yet, it is the best solution and according to national and international regulations the businesses are perceived to be compliant.

Originality/value

This paper offers new insights on the challenges of AML regulations in crypto assets, given the limited information available. It also provides good practice examples for addressing these challenges, benefiting policymakers, regulators and practitioners in the crypto asset ecosystem.

Details

Journal of Money Laundering Control, vol. 27 no. 2
Type: Research Article
ISSN: 1368-5201

Keywords

Article
Publication date: 1 March 2022

Fabian Maximilian Johannes Teichmann and Chiara Wittmann

The purpose of this article is to determine how terrorist financiers have continued to exploit hawala banking in German-speaking countries, despite regulations in place to…

Abstract

Purpose

The purpose of this article is to determine how terrorist financiers have continued to exploit hawala banking in German-speaking countries, despite regulations in place to prohibit this.

Design/methodology/approach

The first author interviewed compliance officers and suspected criminals on hawala banking mechanisms. Formal interviews with compliance officers were recorded, but interviews with suspected criminals were not, to maximize their potential forthrightness. The number of interviews totaled to 70 and a questionnaire was based on this that was sent to 200 compliance officers. The interviews were analyzed with a qualitative analysis and developed a system of categories that, in turn, was assessed by means of triangulation. These interviews enabled the first author to translate the empirical findings into his own recommendations for improving regulatory procedures prohibiting the financing of terrorism.

Findings

The paper finds that it is possible to circumvent compliance measures and exploit hawala banking to finance terrorism. Compliance officers consider the chances of detecting terrorist financing to be “low,” which is illustrated by mapping out the individual steps of the asset transfer. The conducted interviews enabled the first author to translate the empirical findings into his own recommendations for improving regulatory procedures prohibiting the financing of terrorism.

Research limitations/implications

The scope of application of results was duly considered.

Originality/value

Whilst the existing literature sufficiently connects hawala banking to terrorist financing, this article details how existing compliance measures are circumvented. Emergent policies must consider the current vulnerabilities to improve their effectiveness.

Details

Journal of Money Laundering Control, vol. 26 no. 5
Type: Research Article
ISSN: 1368-5201

Keywords

Article
Publication date: 25 May 2023

Abhiyan Upadhyay

The purpose of this paper is to understand the financial opaqueness established through offshore businesses and financial secrecy through the requirements of information…

Abstract

Purpose

The purpose of this paper is to understand the financial opaqueness established through offshore businesses and financial secrecy through the requirements of information exchanges, and their deadly combination for facilitating money-laundering activities and tax evasion. It also puts into light some key recommendations for a country like Nepal that has been struggling to put adequate efforts into understanding financial opacity and secrecy.

Design/methodology/approach

This paper navigates through global issues on layering through opaque corporate structures, and mechanisms required for information exchange so as to figure out solutions and challenges to address them by developing countries like Nepal, with specific actions pertaining to Nepal.

Findings

Understanding financial opacity and secrecy is a prerequisite to tackling financial crimes. While focusing on global solutions and inherent challenges regarding such issues, concerted efforts are required to capacitate a country on contextual matters.

Originality/value

This work is an original work with an analysis of a global issue in an interconnected world with solutions catered to the local contexts of Nepal.

1 – 10 of 507