Illegal activities of financial intermediaries: A burden of trust crisis

Brychko, Maryna; Савченко, Тарас; Vasylieva, Тetiana; Piotrowski, Paweł

doi:10.14254/2071-8330.2021/14-1/12

Cited by 12 publications

(4 citation statements)

References 89 publications

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“…Based on the explication of structural and functional relationships, Brychko et al2021) [ 20 ] developed a scientific and methodological approach to modeling the relationship between the illegal activities of financial intermediaries, a crisis of confidence in the financial sector and its deformations. Using structural equation modeling tools, a mediator analysis was carried out, the results of which confirmed the hypothesis that the crisis of confidence in the financial sectors leads to an increase in the number of shadow transactions involving financial intermediaries.…”

Section: Theoretical Frameworkmentioning

confidence: 99%

Dynamic stability of the financial monitoring system: Intellectual analysis

et al. 2023

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Introduction Although there is a growing number of scientific publications on financial monitoring, combating money laundering, the shadow economy, and the impact of corruption on economic development, further research needs to determine the stability of the national financial system in dynamics. The dynamic stability of the national financial monitoring system subjects will allow to adequately assess the effectiveness of the existing national financial monitoring system in each country and determine the influential factors. Materials and methods The article investigates an approach to identifying the dynamic stability of the national financial monitoring system subjects based on the calculation of the integrated indicator of the country’s financial system propensity to ALM, vector autoregression (VAR) model taking into account time lag. The proposed integrated indicator allowed to adequately assess the existing financial monitoring systems of the countries (15 countries of the European Union for 2000–2020: Austria, Belgium, Cyprus, Estonia, Finland, France, Greece, Ireland, Italy, Latvia, Malta, Netherlands, Portugal, Slovak Republic, Spain). In addition, vector autoregression models (VAR) of the dependence of the country’s financial system propensity to ALM on the regressors Government Integrity, Index of economic freedom, Monetary Sector credit to the private sector (% GDP), were built, taking into account time lags in general and for each studied country. Results According to the modeling results, the national financial monitoring systems in Austria, Belgium, Estonia, Finland, France, Ireland, Netherlands, Slovak Republic, Spain were resistant to money laundering. It is vice versa in Malta, Greece, Cyprus, Portugal, Italy, Latvia. These conclusions are also confirmed based on a binary approach. Such exogenous variables as Government Integrity (with a lag of 2 years) and the Index of economic freedom (taking into account the time delays of the regression reflection under the influence of this regressor for 1 and 2 years) have a statistically significant effect on the country’s financial system. Conclusion The general vector autoregression (VAR) model shows that the current value of the country’s financial system propensity to ALM by 92.78% is determined by its previous value. With an increase of Government Integrity by 1%, the country’s financial system’s propensity to ALM will decrease by 0.000616 units with a lag of two years. The nature of the impact made by the Index of economic freedom on the performance feature was specific—when this indicator increases by 1% for a lag delay in one year, the PFSALM value will decrease by 0.001997 units, and for a lag delay of two years it will change the trend and increase by 0.003076 units per unit, respectively.

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Section: Theoretical Frameworkmentioning

confidence: 99%

Dynamic stability of the financial monitoring system: Intellectual analysis

et al. 2023

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“…and Nguen K.M. 2021), on the stability of the financial sector: banks (Vasileva T. and Lasukova A., 2013) and banking system (Vasilyeva T. et al, 2016;Kuznyetsova A. et al, 2017), other financial intermediaries (Brychko M. et al, 2021;Fedajev A. et al, 2022). The financial instability causes vulnerabilities in national security (Yarovenko, H., 2020;Shpak N. et al, 2020) and investment attractiveness of the country (Moskalenko B. et al, 2022;Kozmenko S. and Vasilyeva T., 2008).…”

Section: Literature Reviewmentioning

confidence: 99%

Structural modelling for assessing the effectiveness of system for countering legalization of illicit money

Lyeonov¹,

Hlawiczka²,

Boyko³

et al. 2022

Journal of International Studies

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The article suggests a scientific and methodological approach to the evaluation of the infrastructural component’s effectiveness in the anti-money laundering system due to digitalization. Structural modelling is the basis for the mentioned approach implementation, which consists of several steps. First, the input data is selected in terms of the effective regulation of the financial services market, law enforcement and judicial activities, and digitalization. Next, the moving average method is used to identify the growth rate of missing values in the available data series. Then, the selection of relevant factors for financial services market regulation, law enforcement activity, judicial activity and digitalization is based on the principal component analysis. After reducing the input array of data to a comparable form, a structural equations system can be constructed to reflect the impact of the digitalization level on the latent integral characteristics of the directions of anti-money laundering work done by regulatory authorities. Finally, the model is checked for adequacy. The result of this research can serve as an information base for further strengthening the digital vector in the development of regulation institutions and law enforcement agencies overseeing the financial services market, as well as for the radical transformation of courts in Ukraine since digitalization currently negatively affects them.

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“…Firstly, corruption can negate the efforts of the international community to ensure carbonneutral economies, namely, reducing greenhouse gas emissions and neutralizing the negative consequences of climate change in the world. Secondly, corruption hinders economic growth (Simovic, 2021), transforms business operations destructively (Metzker et al, 2021;Aliyeva, 2022), discourages employment and investment (Nguyen et al, 2021;Al-Faryan, 2022;Lestari et al, 2022), as well as stimulates the illegal financial activities (Brychko et al, 2021;Sedmíková et al, 2021;. Based on survival analysis, this study proposes a scientific and methodological approach to assess the impact of corruption in the climate finance field on climate change dynamics.…”

Section: Introductionmentioning

confidence: 99%

The impact of corruption in climate finance on achieving net zero emissions

Lyeonov

Toušek

Bozhenko

et al. 2023

Journal of International Studies

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The study’s primary purpose is to assess the probabilistic impact of corruption in climate finance on achieving zero emissions. This scientific problem is highly relevant since the largest recipients of international climate assistance are countries with significant corruption in the public sector. Thus, it is necessary to increase the transparency in the use of international assistance funds and strengthen accountability. The study used the methods of survival analysis, namely the Kaplan-Meier approach and the Cox proportional hazards regression model, to investigate 114 countries that received international climate assistance during 2005-2021. The empirical analysis showed that the most probable time frame for achieving 5% reduction in greenhouse gas emissions is five years. Moreover, the response of climate finance to reducing greenhouse emissions is faster in countries with medium levels of corruption than in countries with high and very high levels of corruption. Two covariates (the level of corruption and the volume of climate finance) likely to affect the achievement of net zero emissions were chosen to build the Cox proportional hazards model. The study empirically confirms that with a 1-point increase in the Corruption Perceptions Index, the probability of reducing emissions increases by 2.4581%, while the volume of climate finance does not have a statistically significant impact on the performance indicator. It suggests that current climate investment in underdeveloped countries is incapable of mitigating the negative impact of climate change.

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Illegal activities of financial intermediaries: A burden of trust crisis

Cited by 12 publications

References 89 publications

Dynamic stability of the financial monitoring system: Intellectual analysis

Dynamic stability of the financial monitoring system: Intellectual analysis

Structural modelling for assessing the effectiveness of system for countering legalization of illicit money

The impact of corruption in climate finance on achieving net zero emissions

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