Use of monitoring to reduce bank risk in the area of money laundering and terrorist financing

Abstract

The article is aimed at researching the essence and peculiarities of risks of banking system, in particular those related to legalization of illegal incomes, as well as formation of recommendations on leveling of such types of risks by means of monitoring instruments. The works of foreign and domestic scholars on the is¬sues of occurrence and classification of risks of banking activity are analyzed, the essence and peculiarities of bank risks are concretized using the monographic method and morphological analysis, including the risks related to the legalization (laundering) of proceeds of crime, financing of terrorism and the proliferation of weapons of mass destruction. The operations that most often fall under the criteria of financial monitoring are closer defined from the point of risk. The legislative, methodological and institutional provision of regulation of banking activity and implementation of internal and the State monitoring are analyzed. The analysis and evaluation of Ukrainian banks’ compliance with economic standards of activity, their dynamics, tendencies of change and degree of instability are determined. On the basis of the obtained results, the directions of adjustment in the sphere of banking regulation are defined and ways of improvement of the financial monitoring system of banking activity are suggested.