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Money laundering and bank risk: Evidence from U.S. banks
Author(s) -
Altunbaş Yener,
Thornton John,
Uymaz Yurtsev
Publication year - 2021
Publication title -
international journal of finance and economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.505
H-Index - 39
eISSN - 1099-1158
pISSN - 1076-9307
DOI - 10.1002/ijfe.2044
Subject(s) - money laundering , business , sample (material) , economics , financial system , monetary economics , finance , chemistry , chromatography
We test for a link between bank risk and enforcements issued by U.S. regulators against banks for money laundering (ML) in a sample of 960 publicly listed U.S. 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 ML on bank risk is accentuated by the presence of powerful CEOs and only partly mitigated by large and independent executive boards.