Banks Have a Role in Money Laundering- CBN
Interim Governor of Central Bank of Nigeria, CBN, Dr. Sarah Alade, has accused banks of aiding money laundering, which has put their integrity, professional and ethical standards in doubt.
Speaking at the regional course on Combating Money Laundering and other Financial Crimes organized by the West African Institute for Financial and Economic Management, WAIFEM, in Abuja, yesterday, she said that the involvement of banks in money laundering were in several respects.
According to her, “bank facilities are used knowingly or unknowingly to further the act of money laundering and in most cases to retain the proceeds of such crime.”
She said: “Over 80 percent of the proceeds of money laundering are associated with banks, one way or the other, all over the world.”
She explained that such activities included round tripping, financial fraud, capital flight, fake cheques, fake currency, advanced fee fraud and insiders abuse.
Those involved in those acts, she argued, cause distortions in the financial markets through misallocation of investment, warning that money laundering also has a dampening effect on foreign direct investment, FDI, “when a country’s commercial and financial sector are perceived to be associated with the incidence of organized crimes.”
She also stated that such practices have “deleterious macroeconomic consequences such as inexplicable changes in money demand, prudential risks to banks soundness, contamination effects of legal financial transactions and increased volatility of international capital flows and exchange rate due to unanticipated cross border asset transfers.”
The boss also lamented that a concentration of economic power by organized crime spells doom and could all too easily infect the political terrain of any nation.
The activities of money laundering and terrorists were described as borderless and they “form part of a large network operating across agencies and across borders.”
This, she said, has exerted more pressure on governments in the sub-region to put in place adequate measures to combat this menace.
In view of the growing menace of money laundering, law enforcement, she said, “Appears a needle in a haystack effort” but this should neither deter nor dampen the enthusiasm of law enforcers.
Speaking earlier at the event, the Director General of WAIFEM, Professor Akpan Ekpo, described money laundering as a key threat to financial stability in any economy, especially developing economies.
He urged regulatory authorities in the West Africa to close ranks.