Assessing Money Laundering Risk of Financial Institutions with AHP: Supervisory Perspective

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DOI: 10.4236/jfrm.2013.21004    5,426 Downloads   12,045 Views  Citations
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ABSTRACT

This paper proposed a risk assessment model with which supervisory authorities can calculate the money laundering risk (MLR) level of financial institutions and make comparisons among multiple institutions. The model is based on the Analytic Hierarchy Process (AHP) and decomposes MLR into two second-tier criteria, i.e. Inherent Risk & Control Risk. AHP pair wise comparisons made by the experts from various fields are processed through AHP software to get the weight of each factor. Using this model, MLR of each financial institution could be obtained and certain comparison among them could be carried out.

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Jia, K. , Zhao, X. & Zhang, L. (2013). Assessing Money Laundering Risk of Financial Institutions with AHP: Supervisory Perspective. Journal of Financial Risk Management, 2, 29-31. doi: 10.4236/jfrm.2013.21004.

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