Money laundering exposes banks to liquidity risk –Expert

Financial institutions indulging in money laundering and terrorism related activities are prone to higher liquidity risks as funds derived from such illicit projects tend to be less stable, experts have warned.

Speaking at a public lecture entitled, “Contemporary Issues in AML/CFT Compliance: Pathway for FIS in Nigeria,” organised to mark the 20th anniversary of DataPro Ltd., its founder, Abimbola Adeseyoju, noted that compliance has become a tool for survival even as he warned that money laundering and terrorism, if not stemmed, may jeopardise the socio-economic development of the country.

He said that banks are highly exposed to economic and financial crime hence the need for organisations to upscale Anti- Money Laundering and Counter Financing of Terrorism (AML/CFT) and conduct comprehensive risk ratings in every sphere of the society, as criminals are using sophisticated evolving methods to keep pace with emerging channels and technology.

The Director General, West African Institute for Financial and Economics Management (WAIFEM), Prof. Akpan Ekpo, on his part disclosed that the perpetrators of money laundering are largely those in political power who make efforts to frustrate anti-money laundering activities.

According to him, money laundering and terrorism have done immense damage to the political and socio-economic space of the African continent in general and Nigeria in particular.

Ekpo reiterated the need for collaborative efforts to build capacity continuously to combat the menace of money laundering and terrorism to the barest minimum.

In delivering the anniversary lecture, the GMD/CEO of Access Bank, Herbert Wigwe, admitted that banks were most vulnerable to abuse for the purpose of money laundering.

According to him, financial institutions that are seen condoning money laundering and terrorism activities would lose public confidence and the confidence of their depositors.

“Money laundering undermines the integrity and stability of financial institutions and systems, discourages foreign investment, and distorts international capital flows. It has negative consequences for our country’s financial stability and economic performance, draining resources from more productive economic activities,” Wigwe said.

He said, “with the current trend of not taking sufficient enforcement measures on the criminals and proceeds of crimes, the fight is being perceived to be undertaken with kid gloves.”

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