Financial enmeshment – banking systems in Western, and Central and South‐Eastern Europe: The interacting factors of anti‐money laundering, the rigours of transitional economy, and the underground illicit economy

Abstract

Purpose

The purpose of this paper is to analyse the banking systems in Western, and Central and Southeastern Europe, focusing on the interactive factors of anti‐money laundering, transitional economies and the underground illicit economy.

Design/methodology/approach

Provides a comparative analysis of the banking systems in Western, and Central and Southeastern Europe.

Findings

The transition economies of central and Southeastern Europe face, and have been confronted for over a generation by, the interlinked problems of the transition stage post‐1989, the alternative or illegal economy, and the vulnerability of banking systems to money laundering. In contrast, by the 1990s, Western European central banks have become established as an essential government organ in macro‐economic policies.

Originality/value

Suggests an interesting lesson that might be gained from the experiences of central and Southeastern Europe and anti‐money laundering since the late‐1990s, where a national bank or central bank has not been essential, indeed has been comparatively unimportant, compared to the developed banking system led by the individual banks.

Citation

Ridley, N. (2006), "Financial enmeshment – banking systems in Western, and Central and South‐Eastern Europe: The interacting factors of anti‐money laundering, the rigours of transitional economy, and the underground illicit economy", Journal of Money Laundering Control, Vol. 9 No. 1, pp. 89-98. https://doi.org/10.1108/13685200610645247