Anti-money laundering disclosures and banks’ performance

Author:Haitham Nobanee, Nejla Ellili
Position:Department of Economics and Finance, Abu Dhabi University, Abu Dhabi, United Arab Emirates
Pages:95-108
SUMMARY

Purpose The purpose of this paper is to explore the extent of anti-Money laundering (AML) disclosures in the annual reports and websites by differentiating between UAE Islamic and conventional banks, and examine the effect of AML disclosure on UAE bank’s performance. Design/methodology/approach This study uses content analysis to explore the extent of AML disclosure in the annual ... (see full summary)

 
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Anti-money laundering
disclosures and banks
performance
Haitham Nobanee and Nejla Ellili
Department of Economics and Finance, Abu Dhabi University, Abu Dhabi,
United Arab Emirates
Abstract
Purpose The purpose of this paperis to explore the extentof anti-Money laundering (AML) disclosures in
the annual reports and websites by differentiating between UAE Islamic and conventional banks, and
examine the effectof AML disclosure on UAE banks performance.
Design/methodology/approach This study uses content analysis to explore the extent of AML
disclosurein the annual reports and the dynamic panel data two-step robustsystem to study the impact of the
AML disclosureson banking performance.
Findings The ndings show that AML disclosureis at a low level for all UAE banks, conventional and
Islamic banks.The results also show that the degree of AML disclosure on the websites of the banks is higher
than that in the annualreports.
Research limitations/implications The sample for this study comes only from banks traded on
UAE markets.Thus, the results may not be generalizable to banks tradedon other nancial markets.
Practical implications Because of the cross-bordercharacter of the money laundry practices, our study
suggests the UAE central bank to internationalize the AML regulations anddevelop an international AML
regime as effortsto respond to the international developmentof the money laundry practices.
Originality/value This is the rst study that develops an index to measure the AML disclosure and
contributessignicantly in providing greater insight in respectto AML disclosure in banking industry within
the emergingmarkets.
Keywords Islamic banks, Dynamic panel data, Anti-money laundering, Banking performance,
Voluntary disclosures
Paper type Research paper
1. Introduction
Money laundering is denedas a process where illegally obtainedmoney, such as from drug
trafcking, terrorist activity or other serious crimes, is given an appearance of having
originated from a legitimate source.
At the international level, there are many endeavors to combat the crime of money
laundering and they are found in the effortsof the World Bank promoting measures halting
or slowing the ow of money into the emergingmarkets, the international accords including
the Vienna Convention, the 1990 Council of Europe Convention, the Basel Committee
Statement of Principles, the European Union Directive, the International Criminal Police
Organization (INTERPOL), the Resolution of the International Organization of Securities
Commissions and the FinancialAction Task Force (FTAF).
JEL classication C33, G32, G34
Anti-money
laundering
95
Journalof Financial Crime
Vol.25 No. 1, 2018
pp. 95-108
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-10-2016-0063
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1359-0790.htm

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