Abstract
We test for a link between bank risk and enforcements issued by US regulators against banks for money laundering (ML) in a sample of 960 publicly listed US banks over 2004-2015. ML-related enforcements are associated with increased bank risk on several measures of risk with the result robust to a variety of estimation methodologies. Moreover, the impact of money laundering on bank risk is accentuated by the presence of powerful CEOs and only partly mitigated by large and independent executive boards.
| Original language | English |
|---|---|
| Pages (from-to) | 4879-4894 |
| Journal | International Journal of Finance and Economics |
| Volume | 26 |
| Issue number | 4 |
| Early online date | 1 Aug 2020 |
| DOIs | |
| Publication status | Published - Oct 2021 |
Keywords
- Bank risk
- Money laundering
- Bank boards
- CEO power
- US banks