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.”