A dynamic threshold analysis of effect of Financial Action Task Force (FATF) measures on financial inclusion: evidence from the world
Abstract
Purpose
This study aims to examine the effect of Financial Action Task Force (FATF) compliance on the degree of financial inclusion (FI) across 174 economies during the period from 2011 to 2021, including developed and developing countries.
Design/methodology/approach
This paper uses panel dynamic threshold regression to examine whether there is a threshold effect that exists in FATF compliance.
Findings
The findings show that FATF regulations enhance financial inclusiveness all over the world, but at the same time, FATF regulations regarding AML/CFT implications impose a high cost on financial institutions above the threshold of FATF compliance.
Research limitations/implications
This study’s findings indicate that nations should undertake deliberate struggle to reduce the prevalence of money laundering (ML) and terrorism financing by putting in place effective FATF regulatory frameworks to support FI.
Originality/value
This study’s findings indicate that nations should undertake deliberate struggle to reduce the prevalence of ML and terrorism financing by putting in place effective FATF regulatory frameworks to support FI. Regulators must, however, guarantee that the process is cost-effective and efficient.
Keywords
Acknowledgements
“Valid to every operation is a co-operation.” The author really agrees to this wonderful quotation put forth by Mr Frank. This paper was successful due to the cooperation extended by her supervisor, Dr Luo Guang, Professor of Finance, HUST, China, who’s deep sharing and synergy has moved her many levels beyond her thinking and gave her strength and permission to conduct that research.
Declaration: There is no funding source.
Conflict of interest: On behalf of all authors, the corresponding author states that there is no conflict of interest.
Author’s contribution: The whole manuscript has been written by the principal author, MsShama Urooj.
Data availability: Data can be available on demand.
Citation
Urooj, S. (2023), "A dynamic threshold analysis of effect of Financial Action Task Force (FATF) measures on financial inclusion: evidence from the world", Journal of Money Laundering Control, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JMLC-07-2023-0128
Publisher
:Emerald Publishing Limited
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