Alade Expresses Concern over Banks' Role in Money Laundering

13 May 2014

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Caption: Ag. CBN Governor, Dr. Sarah Alade

James Emejo

The acting Governor of the Central Bank of Nigeria (CBN), Dr. Sarah Alade has expressed concern over the increasing role of banks in aiding money laundering worldwide.

She regretted that "bank facilities are used knowingly and unknowingly to further the act of money laundering and in most cases to retain the proceeds of such crime."

Speaking yesterday in Abuja at the opening of a seminar on combating money laundering and other financial crimes, which was organised by the West African Institute for Financial and Economic Management (WAIFEM), she added that "over 80 per cent of the proceeds of money laundering are associated with banks, one way or the other, all over the world."

She said money laundering and other financial crimes are increasingly manifesting in round tripping, financial fraud, capital flight, fake cheques, fake currency minting, advanced fee fraud and insiders abuse among others.

Represented by the Director, Research of the CBN Mr. Charles Mordi, the acting CBN governor said the attendant effects of money laundering and related economic and financial crimes cause distortions in the financial markets through misallocation of investment.

She said:"Deleterious macroeconomic consequences such as inexplicable changes in money demand prudential risks to banks soundness, contamination effects ob legal financial transactions and increased volatility of international capital flows and exchange rate due to unanticipated cross-border asset transfers."

She added that the implication of the menace has the potential to affect foreign direct investment (FDI) "when a country's commercial and financial sector is perceived to be associated with the incidence of organised crimes."

She argued that integrity remained a key asset of financial institutions which depends on perception to functions within a framework of high legal, professional and ethical standards.

She further warned that the concentration of economic power by organised crime spells doom which could easily affect the political terrain of any nation.
Also at the occasion, Director General of WAIFEM, Prof. Akan Ekpo described money laundering as a key threat to financial stability particular in small and fragile economy.

Tags: Business, Nigeria, Featured

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