Critical Evaluation of the TBTF Problem and How Far the ‘Implicit Guarantee’ Referred to Above Has Been Removed or Reduced by EU/UK Post-Crisis Banking Regulation.

Today’s financial world contains several different markets, but it also directly or indirectly effects the other commercial markets in an important way. The foundation of the financial services is as old as the foundation of the money. But nowadays, especially when customer, people, company even governments and countries become much needed for money, the importance of financial institutions become much important, so important that they become TBTF (Too Big To Fail). TBTF means that certain businesses, such as the banks, are so vital to an economy that it would be disastrous if they bankrupt. To avoid a crisis, the government can provide bailout funds which support failing business operations, protecting companies from their creditors and also protecting creditors against losses[1]. In this assignment, I will try to criticize and analyse the TBTF problem, the effects of it, what the countries, governments or international institutions did to fix these problems and their effects, and regulations and laws related for this problem, critically evaluate the financial crisis of 2008.

The global economic crisis faced by developed countries in 2008 has become the largest in history. From the moment the crisis began to the moment when it was possible to overcome its consequences, many states took up to 5 years[2]. Economists agree that the reasons of the global crisis of 2008 are, the logical transition of the world economy from a growth cycle to a recession, imbalance in international trade and in capital flows, overheating of the economy against the background of an uncontrolled process of growth in mortgage lending[3].

The problem of the financial crisis is started on mortgage lending. However, it was also bad risk managements made by the bank rushed it up. Because there was not any relevant legislation, codes in the time and also an implicit guarantee from the state to the financial institutions, bank took enormous risks and let the economy to a disaster. TBTF problem not occurred but shown and understood at this point. The too big to fail dilemma (TBTF, “too big to fail”) was whether to provide financial assistance to large banks in distress — or whether they should go bankrupt without spending money from the budget (and thereby save taxpayers) and not including money machine. In most cases, the financial authorities opted for the first option, since the costs of potential bankruptcy — a drop in investor confidence in the banking system, loss of the private sector, and a slowdown in GDP growth — seemed (and possibly were) prohibitively high. Criticism related to the fact that ordinary taxpayers actually had to cover losses from their own pocket due to the failure of management teams in large banks, forced the financial authorities (primarily in the US and the EU) to significantly expand the range of tools used to regulate systematically significant financial institutions.

The solution to the problem went in two directions. Firstly, the regulators were faced with the task of increasing the stability of systemically important banks in order to prevent the likelihood of defaults of large financial institutions. It was this task that was intended to be solved by determining the list of systemically important banks and introducing regulatory premiums to capital adequacy ratios. If both problems were successfully resolved, the state could move on to the next step - to legislatively limit its own ability to provide support to large financial institutions in distress, fully teaching them how to “fall correctly,” that is, to take steps to heal themselves. Then, large banks could only rely on themselves, taxpayers would not have a reason to criticise inefficient spending of the budget, and the TBTF problem would not have been completely resolved, it would have significantly softened. It seems that the plan is quite simple and clear, but over the nearly ten years that have passed since the global financial crisis, only Switzerland, the EU, the USA and Canada have progressed most significantly in implementing this plan. UK's closest neighbours - EU countries - took the first step in this process in 2014, when the European Bank Recovery and Resolution Directive, a key document harmonising the approach to financial recovery of banks in the EU, was adopted.

The problems that led the bank to the point of non-viability are quite common: poor asset quality, the need to create substantial reserves for possible losses, pressure on liquidity indicators. An innovative way was financial recovery, which was fairly orderly and strengthened the confidence of investors and the market as a whole in the effectiveness of the new directive. On the other hand, real life has raised new issues for regulators.

BRRD, SRM and BIS

The negative impact of financial crises and the continuation of these crises in the markets for years necessitate the introduction of regulations on controlling for to minimize the occurrence of financial crises. In 2013, the EU introduced and adopted Bank Recovery and Resolution Directive called BRRD. The purpose and aim of the BRRD is to set a framework for a number of EU member countries on how to effectively deal with troubled banks[4]. The Directive planned to implement to the Eurozone countries through the Single Resolution Mechanism (SRM). SRM is one of the three important pillars – together with the Single Supervisory Mechanism (SSM) being built by the ECB, and a Single Deposit Guarantee Scheme (DGS) - which the Member States of the Eurozone agreed should be the foundation of their Banking Union[5].

The importance of BRRD is because it directly accepts that the investors, not the taxpayers, must absorb the first costs for banks bad risk management. The principle is directly aiming moral hazard by limiting the risks that banks take on. Banks will have to prepare and maintain recovery plans, establishing how they would deal with problems – these plans will be subject to ongoing and attentive scrutiny by regulators[6].

BIS (Bank for International Settlements) developed a series of international banking regulations called Basel III to promote stability in the international system[7]. Basel III is an additional regulation prepared by the Basel Committee to strengthen the financial regulations and supervision in order to eliminate the insufficient aspects of the Basel II consensus and reduce the risk in the banking sector after the 2008 Global Financial Crisis. Although Basel III has been issued to complement the shortcomings of the Basel II consensus, it adds new approaches to Basel II. The definition of capital, counter-party credit risk approach, the definition of capital buffer by changing the capital ratio is one of the innovations added to Basel II. The objectives of the Basel III regulations are to organize capital in order to strengthen the financial sector, and to increase the resilience and transparency of banks against risk environments through micro and macro regulations[8].

Evaluation

The BRRD seems to aim to solve the problems in the financial market on behalf of the investors and depositors by limiting banks, however there are couple of questions about it too. It gives priority to senior debt holders for to bailed-in, so the depositors whom have deposits under a certain amount will not bailed-in. Because of the funds for resolution planned to build up on a 10-year passing period, only a limited funding will be available. The requirements and standards set for the banks are minimum based on their size, risk and approach for resolution[9].

Although the Basel III regulations aiming to solve the financial crisis problem, it is worried it will bring strict rules of capital and liquidity that could lead to a global economic crisis. Another concern is that the weakening of one country's economic system can easily affect other countries.

Conclusion

While the BRRD provides comprehensive and useful solutions to the problem, more obligations may be imposed on banks to increase their responsibilities to investors and the government. If it is a very large corporation/financial institution for the economy, it can be achieved by increasing the tax rates, thus aiming to control the high-risk transaction rates or to prevent bad risk management since financial institutions will be taxed in proportion to their income. By imposing the necessity of having equity in proportion to the transactions of the financial institutions and especially the risky transaction portfolios, it is possible to recover financially in a possible bad investment scenario in a way that affects investors and depositors in minimum. Adopting a policy between investors and depositors without prioritization in terms of return of their capital will reduce the moral hazard. Although the Basel III is also aiming to find a solution to prevent future financial crises by bringing new regulations, it also does not answer the problem of TBTF effectively. The situation of depositors and investors are still in the grey area and for to avoid moral hazard, some new regulations have to add to it.

References

Young J, 'Too Big To Fail Institutions Create Havoc On Economic Systems' (Investopedia, 2019) accessed 10 November 2019

Chance C, 'UK Implementation Of The EU Bank Recovery And Resolution Directive: What You Need To Know'

'Financial Services Risk & Regulation' (PwC, 2014)

'Basel III Nedir? | Piyasalar Haberleri' (businessht.com.tr, 2017)

Perry B, 'Understanding The Basel III International Regulations' (Investopedia, 2019)

Caprio Jr, Gerard, Vincenzo D’Apice, Giovanni Ferri, and Giovanni Walter Puopolo. "Macro-financial determinants of the great financial crisis: Implications for financial regulation." Journal of Banking & Finance 44 (2014): 114-129.

Kim, Teakdong, Bonwoo Koo, and Minsoo Park. "Role of financial regulation and innovation in the financial crisis." Journal of Financial stability 9, no. 4 (2013): 662-672.

[1] Julie Young, 'Too Big To Fail Institutions Create Havoc On Economic Systems' (Investopedia, 2019)

[2] Kim, Teakdong, Bonwoo Koo, and Minsoo Park. "Role of financial regulation and innovation in the financial crisis." Journal of Financial stability 9, no. 4 (2013): 662-672.

[3] Caprio Jr, Gerard, Vincenzo D’Apice, Giovanni Ferri, and Giovanni Walter Puopolo. "Macro-financial determinants of the great financial crisis: Implications for financial regulation." Journal of Banking & Finance 44 (2014): 114-129.

[4] Clifford Chance, 'UK Implementation Of The EU Bank Recovery And Resolution Directive: What You Need To Know'.

[5] 'Financial Services Risk & Regulation' (PwC, 2014) accessed 11 November 2019.

[6] 'Financial Services Risk & Regulation' (PwC, 2014) accessed 11 November 2019.

[7] Brian Perry, 'Understanding The Basel III International Regulations' (Investopedia, 2019) accessed 11 November 2019.

[8] 'Basel III Nedir? | Piyasalar Haberleri' (businessht.com.tr, 2017) accessed 11 November 2019.

[9] 'Financial Services Risk & Regulation' (PwC, 2014) accessed 11 November 2019.

CRITICALLY EVALUATION OF THE 5^TH ANTI-MONEY LAUNDERING DIRECTIVE AND HOW FAR DOES IT ADDRESSES THE MONEY LAUNDERING RISKS POSED BY VIRTUAL CURRENCIES

Introduction

The EU attaches great importance to anti-money laundering and combating terrorist financing and formulates and implements high standards of laws and regulations through the design of a strict institutional framework[1]. In accordance with the EU series of anti-money laundering directives, the UK has established a complete set of anti-money laundering laws and regulations and management systems. Compared with other European countries, the UK's anti-money laundering crimes cover a wider range, stricter regulatory requirements and greater penalties[2].

At present, the international political and economic situation and the global situation of anti-money laundering are more complicated. Due to the advancement of science and technology and the more developed and technical means, illegal fund trading activities are more difficult to regulate. International anti-money laundering and anti-terrorist financing have become one of the major concerns of the international community[3]. This paper is critically evaluating the 5^th Anti-Money Laundering Directive, risks posed by virtual currencies, the laws that were introduced by EU and BIS and the 5^th AMLD. The assignment consists an introduction part, evaluation of the Directive, the scope of it, meaning and again the scope of virtual currency as it described in the 5th Anti Money Laundering Directive (5th AMLD), problems on the market, potential money laundering possibilities by not violating the law, in other words using the loopholes in the law, and conclusion and recommendations about the problems.

Background

5th anti-money laundering (AML) is a financial terminology that collectively s to the laws, regulations, procedures, and instituted control-mechanisms that are adopted by the FIs to detect and report MLA. The purpose of 5th AML systems is to stop the practice of generating money using illegal actions. It is incumbent on the FI to comply with AML regulation and procedures. Consequently, if MLA occurs without being reported, then the FI will be penalized for lack of compliance. 5th anti-Money laundering systems (AMLS) are categorized into several governmental and commercial systems, each one tailored toward the demand and functionality of the adopting organization. Some organizations implement a 5th AMLS for internal use, such as FAIS of FinCEN, whereas other organizations implement 5th AMLS for global use, such as IMoLIN. A 5th AML system combines the information gathered with the knowledge of experts to decide on the possibility and severity of MLA[4]. The terrorist attacks of September 11, 2001, in the UK's, also brought to attention the abuse of the UK financial system in facilitating money laundering and terrorist financing. Money laundering is the process of concealing the existence of income derived from criminal activity and subsequently disguising the source of that income through the financial system to make it appear legitimate.

The Bank Secrecy Act of 1970 (BSA) and the Uniting and Strengthening UK by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (UK PATRIOT) Act of October 2001 require banks to identify and report potential money laundering activity. In January 2013, the oldest Swiss bank Wegelin & Co. shut down after paying a penalty of $58 million to UK regulators for non-compliance[5]. Other global banks also violated the BSA and PATRIOT Act, receiving penalties for non-compliance including recent fines on the Agricultural Bank of China for $215 million and Intesa Sanpaolo for $235 million both in 2016[6]. Currently, the 5th anti-Money Laundering (AML) systems are designed to function based on the requirements of and functions within the boundaries of the adopting organization. Increase of sophistication of money laundering techniques can be countered by integrating new techniques such as SNA, in addition to the already existing rule-based analysis and risk modeling. Normal activity for a used car dealership is to see customers come and going some leaving in a newly purchased vehicle, others leaving in the vehicle they came in. The price of the cars sold there will dictate the type of clientele the business attracts. Most patrons will come in pairs or alone. There is no need to bring anything to a used car dealership except for a used car that one intends to sell. The activity at Alex's used car dealership will vary greatly from this norm. Detectives will also see signs of suspicious activity surrounding Alex's used car dealership. Incidents that occur at the dealership will indicate suspicious activity but so will incidents that do not occur there. Detectives will hear information during interviews and interrogations or from witness statements.

Virtual Currencies

Since the introduction of virtual currency, the trading value and issuance of these currencies have exploded. Per Coinmarketcap.com, as of January 27, 2018, the top 100 virtual-currencies hold a market capitalization value of over 594 billion dollars. Additionally, even the smallest virtual-currency on the top 100 list has a value of over 264 million dollars[7]. For this paper, virtual-currency refers to a currency that only exists digitally and utilizes virtual-graphs to prevent counterfeiting and fraudulent transactions. These currencies are not backed by a central bank, government, or regulating authority but instead relies on a decentralized system to record transactions and manages the issuance of new units. Virtual-currencies, which become transferable digital assets, are decentralized when issued by any individual, partnership, entity, or centralized if a regulatory body or government is the issuer and authority. There are significantly fewer centralized currencies than decentralized, in part due to the first centralized currency not being introduced until 2017 by the city of Dubai[8]. A currency is centralized when one government or regulatory body has complete control to change how that currency is regulated and provides a promise to pay a value to the currency. Central authorities are now seeing new possibilities for virtual-currency issuance and how the virtual-currency industry could streamline everything from the municipalities’ records to giving residents a way to pay for public utilities services. Consequently, the virtual-currencies of emCash, Join, and Petro issued from Dubai, Japan, and Venezuela respectively, can be regulated by those governments or government-backed agencies. Due to the decentralized nature of virtual-currency, being open yet still permitting a degree of anonymity and real-time transactions for a mobile environment, it has several advantages over that of centralized government-backed currency. Benefits include lower fees on international trade, lower risk of counterfeiting, less chance for identity theft, access to everyone, no one authority, immediate settlement, and recognition at a universal level[9].

The laws introduced by the EU

In 1990, in order to prevent criminals from using the financial system for money laundering, the EU passed the first anti-money laundering directive, and has since been revised several times. In 2015, in order to implement the new 40 recommendations of the Financial Action Task Force in 2012 and other highest standards in the field of anti-money laundering and counter-terrorism financing, the EU has comprehensively updated existing laws and issued Anti-Money Laundering Directive (EU) and the Regulations for the Transfer of Financial Information (Regulation (EU) 2015/847)[10]. In 2016, due to terrorist attacks in many places in Europe and the outbreak of file documents in Panama, the European Commission proposed amendments to the No. 4 directive. After two years of discussion, Directive (EU) 2018/843 came into effect in July 2018 or the 5^th Anti Money Laundering Directive, and member states need to convert No. 5 into domestic law by January 10, 2020[11].

The 5AMLD added these to the money laundering regulations “(g) providers engaged in exchange services between virtual currencies and fiat currencies; (h) custodian wallet providers;”, virtual currencies are defined in the 5AMLD as “ (18) virtual currencies means a digital representation of value that is not issued or guaranteed by a central bank or a public authority, is not necessarily attached to a legally established currency and does not possess a legal status of currency or money, but is accepted by natural or legal persons as a means of exchange and which can be transferred, stored and traded electronically[12]; (19) “custodian wallet provider” means an entity that provides services to safeguard private cryptographic keys on behalf of İts customers, to hold, store and transfer virtual currencies”.[13]

As it is clear from the recitals, the term ‘virtual currencies’ was meant to encompass all types of tokens. Yet, as shown above, the definition as set out in 5^th AMLD only covers currency tokens. The definition thus creates legal uncertainty. At best, the wording of the Directive is ambiguous. The member states should an altered definition of virtual currencies, so it would allow to be covering all possible uses of tokens. If the current definition of virtual currencies under 5th AMLD remains unchanged, the Directive will only cover those crypto currency exchanges that exchange currency tokens into fiat currencies or vice versa. Crypto currency exchanges that only engage in the exchange of utility and/or investment tokens against fiat currency would not be classified as obliged entities under 5th AMLD. This highlights the need to amend the definition virtual currencies.

Evaluation

As we start to evaluate and criticize the 5^th AMLD the virtual currencies, the problems of it occurs immediately. There is some couple of major risks, problems, on money laundering on virtual currencies. Non custodian wallets are one of them. A non-custodial wallet is a decentralized type of wallet, where the customer owns its private keys. The user gets a file with private keys and needs to write down a mnemonic phrase with which they will be able to restore their funds[14]. According to a wired article, an application called Dark Wallet provides protection to its users on their identities far better than the ones provided by the bitcoin itself[15]. If the program works as promised, it could neuter impending bitcoin regulations that seek to tie individuals' identities to bitcoin ownership. By encrypting and mixing together its users' payments, Dark Wallet seeks to enable practically untraceable flows of money online that add new fuel to the Web's burgeoning black markets[16].

Automated Teller Machine, known as the ATM’s, are one of the problems on laundering the virtual currencies for cash. There are already 25-30 Bitcoin ATM’s in London and these numbers will rise rapidly in a close future. A Bitcoin ATM provides service for the virtual currency users to exchange their coins for cash. As all ATM has a limit for withdrawal (no one can withdrawal all the money that they have in their accounts if it is above the determined limit) Bitcoin ATM’s has also a cash limit for it. But it does not prevent to withdrawal cash for virtual money or the opposite. A virtual currency owner can easily convert his belongings to cash by using these ATM’s and this makes virtual currency market an option and also easy for laundering money. The 5^th AMLD does not have any implementation to prevent people for making these transactions. The virtual currency owners do not have to make identification before making any transactions. By using a verified code, money exchange can be done.

Peer to peer is exchange or sharing of information, data, or assets between parties without the involvement of any institution[17]. Peer-to-peer, or P2P, takes a decentralized approach to interactions between individuals and groups. This approach has been used in computers and networking, as well as with currency trading. These exchanges offer one-to-one relationships and transactions; buyers and sellers of virtual currency sign-up with their location information, IP address and other data to verify their identity, link to their wallets and from there can swap and cash out currencies with other people who decide to trust them[18]. Parties sometimes take the relationship offline too, meeting face-to-face to close out deals. After striking a bargain, a buyer can exchange cash in person, transfer bank funds online or can exchange funds for prepaid cards, gift cards or other crypto currencies. These platforms offer an alternative to the marketplace methods represented by big Bitcoin exchanges such as Coinbase, and many users feel they can get better deals and a better service experience by using them. Peer-to-peer exchanges allow individuals to move currencies from their accounts to the account of others without having to go through a financial institution. P2P networks rely on digital transfers, which in turn rely on the availability of an internet connection. This allows individuals to use computers as well as mobile devices, such as tablets and phones.

Peer-to-peer currencies are not created or exchanged in the same manner as those created by central banks. The creation of new currency as well as the recording of transactions between parties is managed through a network of computers that is not maintained by a government authority and is thus maintained by the collective. In crypto currencies exchanges, these distributed ledgers can confer what P2P advocates consider to be a notable security advantage; with transactions recorded on every peer's network, it is very difficult to overwrite or falsify ledgers in a crypto currency exchange.

In addition to P2P and ATM’s, tumblers provide method for the laundering of money through crypto currencies. Tumblers offer the service of anonymizing crypto currency transactions such that the identity of the person doing the trade is hidden. This is problematic if the virtual currencies stem from criminal activities. The core aim of AML law is based on the need for those criminal activities to be detected and investigated effectively. Obliged entities therefore need to identify customers via KYC checks and report suspicious obligations. If AML law is to prevail over the anonymity offered by tumbler services, providers of such services need to be subject to the above-named requirements. If tumbler services would exist for cash, there would be a service that allows serial numbers of the cash to be altered. The altered bills could not be distinguished from normal ones. If such service would be offered, a government would want people using this service to be at least identified. Further, it would require providers of such services to report any suspicious transactions. Apart from the fact that one might want to ban those services altogether (assuming they would have been legal in the first place) – a government would certainly want them to be obliged entities under AML law. The same must apply to providers of tumbler services. For to make an example, thieves are using masks for to hide their faces. Wearing mask is not a crime but the authorities (police etc.) has to see your face for to identify you or for you to not get suspicious. The crime is stealing or shooting etc. not wearing the mask, mask is for hiding the identity. Tumblers are like the masks, using them is not against law but hides the identification of the crypto currencies

Exchange services from crypto currencies to crypto currencies are another problem and also are not included within the scope of the 5^th AMLD. Criminals can use it to hide their identifications similar to tumbler services. Virtual currency users can exchange their owning’s with each other, by using the platforms mentioned above and they don’t have to exchange it with money all the time. It can also be exchanged with other virtual currencies. A bitcoin user can exchange the owning’s that he/she have with someone’s Litecoin (LTC), Ethereum (ETH), Zcash (ZEC), Dash (DASH) etc. The 5th AMLD is not only regulating this issue; by not directing any sanctions or penalty, it does not make it harder for laundering money. Therefore, there is no obligation for the virtual money user to make an explanation regarding his / her identity when making any swap transactions between virtual currencies. This shows that no effective regulation has been made to prevent money laundering.

Conclusion

It is concluded that although the Directive contains the definition of virtual currencies, there is no obligation that users of virtual money should reveal their identities. Goods that are (relatively) stable in value and that can be easily exchanged provide a strong opportunity for money laundering. Regulating virtual currencies and connected intermediaries within 5^th AMLD is therefore a logical step. According to the Directive’s recitals, this was intended by EU law makers. This assignment has shown that 5^th AMLD does not do so adequately. Its wording is at best unclear. Member States are urged to adapt the proposed alterations for the definition of virtual currencies. Otherwise, national laws will create legal uncertainty that leads to the immediate danger of different interpretations. None of the problems are mentioned beloved are covered by 5AMLD. For to avoid these issues, it is concluded that European Commission should aim to solve the problems in a 6^th AMLD.

References

Das, Mr Sonali, and Mr Amadou NR Sy. How risky are banks' risk weighted assets? Evidence from the financial crisis. No. 12-36. International Monetary Fund, 2012.

Federico, Mr Pablo, and Mr Francisco F. Vázquez. Bank funding structures and risk: Evidence from the global financial crisis. No. 12-29. International Monetary Fund, 2012.

Bengtsson, Elias. "Shadow banking and financial stability: European money market funds in the global financial crisis." Journal of International Money and Finance 32 (2013): 579-594.

Bremus, Franziska, and Marcel Fratzscher. "Drivers of structural change in cross-border banking since the global financial crisis." Journal of International Money and Finance 52 (2015): 32-59.

Caprio Jr, Gerard, Vincenzo D’Apice, Giovanni Ferri, and Giovanni Walter Puopolo. "Macro-financial determinants of the great financial crisis: Implications for financial regulation." Journal of Banking & Finance 44 (2014): 114-129.

Drezner, Daniel W., and Kathleen R. McNamara. "International political economy, global financial orders and the 2008 financial crisis." Perspectives on Politics 11, no. 1 (2013): 155-166.

Ghosh, Saibal. "Risk, capital and financial crisis: Evidence for GCC banks." Borsa Istanbul Review 14, no. 3 (2014): 145-157.

Huang, Xin, Hao Zhou, and Haibin Zhu. "Assessing the systemic risk of a heterogeneous portfolio of banks during the recent financial crisis." Journal of Financial Stability 8, no. 3 (2012): 193-205.

Kim, Teakdong, Bonwoo Koo, and Minsoo Park. "Role of financial regulation and innovation in the financial crisis." Journal of Financial stability 9, no. 4 (2013): 662-672.

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Sciurba, M., (2018). Anti-Money Laundering State Mechanisms: International Experiences, Current Issues and Future Challenges. Edition Faust.

Sesay, Khadijah Gibril. "A Proposed Research Paper on Establishing a Framework for Regulating Volatility, Money Laundering, Terrorist Financing and Environmental Challenges Plagued by Virtual Currencies, for Its Expansion Into Mainstream Commercial and Domestic Uses Across the Group of 20 Countries." Money Laundering, Terrorist Financing and Environmental Challenges Plagued by Virtual Currencies, for Its Expansion Into Mainstream Commercial and Domestic Uses Across the Group of 20 (2019).

Slot, B. and Swart, D.L., (2019). Assessing the outcomes of anti-money laundering policies. Ambitions and reality.

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'L_2018156EN.01004301.Xml' (Eur-lex.europa.eu, 2018)

[1] Das, Mr Sonali, and Mr Amadou NR Sy. How risky are banks' risk weighted assets? Evidence from the financial crisis. No. 12-36. International Monetary Fund, 2012.

[2] Federico, Mr Pablo, and Mr Francisco F. Vázquez. Bank funding structures and risk: Evidence from the global financial crisis. No. 12-29. International Monetary Fund, 2012.

[3] Ghosh, Saibal. "Risk, capital and financial crisis: Evidence for GCC banks." Borsa Istanbul Review 14, no. 3 (2014): 145-157.

[4] Sciurba, M., (2018). 5th anti-Money Laundering State Mechanisms: International Experiences, Current Issues and Future Challenges. Edition Faust.

[5] Levin, S.C., Gutierrez, F.H., Carroll, K. and Alper, E., (2016). 5th anti-money laundering and sanctions compliance challenges for custody services. Journal of Securities Operations & Custody, 8(4), pp.341-355.

[6] Sesay, Khadijah Gibril. "A Proposed Research Paper on Establishing a Framework for Regulating Volatility, Money Laundering, Terrorist Financing and Environmental Challenges Plagued by Virtual Currencies, for Its Expansion Into Mainstream Commercial and Domestic Uses Across the Group of 20 Countries." Money Laundering, Terrorist Financing and Environmental Challenges Plagued by Virtual Currencies, for Its Expansion Into Mainstream Commercial and Domestic Uses Across the Group of 20 (2019).

[7] Singh, K. and Best, P., (2019). 5th anti-Money Laundering: Using data visualization to identify suspicious activity. International Journal of Accounting Information Systems, 34, p.100418

[8] Helgesson, K.S. and Mörth, U., (2016). Involuntary Public Policy‐making by For‐Profit Professionals: European Lawyers on 5th anti‐Money Laundering and Terrorism Financing. JCMS: Journal of Common Market Studies, 54(5), pp.1216-1232.

[9] Slot, B. and Swart, D.L., (2019). Assessing the outcomes of anti-money laundering policies. Ambitions and reality.

[10] Caprio Jr, Gerard, Vincenzo D’Apice, Giovanni Ferri, and Giovanni Walter Puopolo. "Macro-financial determinants of the great financial crisis: Implications for financial regulation." Journal of Banking & Finance 44 (2014): 114-129.

[11] Ibid

[12] Heffron, D. (2019). [online] Pinsentmasons.com. Available at: https://www.pinsentmasons.com/out-law/news/call-to-close-aml-loophole-on-virtual-currencies.