Inter-vulnerability of financial institutions and households in the system of national financial security assessment

Purpose: The aim of this article is to study the concept of financial institutions and households' interrelation of vulnerabilities to the risk of money laundering and the integration of this concept into the methodology of a national ML/TF (Money Laundering and Terrorist Financing) risk assessment. Design/Methodology/Approach: At the theoretical and methodological levels, authors utilized a risk-based approach, which involves the separation of the object of study in risk levels and its impact on each risk level. At the methodological and analytical levels, authors utilized methods of grouping, descriptive analysis, comparison, synthesis, and graphic visualization of data. Findings: The most significant scientific results obtained in the course of the study include: proprietary algorithm for calculating the intensity coefficient of threats to national financial security, which practical approval on data of 27 countries allowed determining the structure of threats to financial security in the international landscape in the period 2013-2018; originally developed questionnaire on the assessment of the risks of deviations in the financial behavior of households and individuals. Originality/Value: The key findings are targeted at their widespread application in assessing money laundering risks at the national and international levels, in developing strategic documents on the development of systems to fight money laundering and terrorist financing. The methodology for identifying the propensity to deviations of financial behavior, based on a questionnaire survey, could serve as the basis for developing scoring systems.The research was supported by Russian Foundation for Basic Research # 18-010-00657.peer-reviewe

Indicators of financial security on the micro-level : approach to empirical estimation

The article suggests an original approach to economic security system indicators formation at micro level based on the assessment of changes in households’ living and financial behavior under economic crisis. An econometric implementation based on the triangular recursive system of equations is used with a multivariate probit model, dealing with unobservable individual heterogeneity, with the bias atributed to omitted variables and endogeneity. The estimation was performed according to the representative survey of the population “The Russia Longitudinal Monitoring Survey - Higher School of Economics (RLMS-HSE) (RLMS-HSE, 2017).peer-reviewe

Transforming the Regulation of Russian Financial Institutions: A Response to Modern Challenges of Money Laundering and Terrorist Financing

The paper reveals the approach to the regulation of Russian financial institutions, which is aimed at identifying their vulnerabilities to risks and building risk profiles for a set of interrelated risks. In the framework of this approach, the authors outline the concept of the relationship between the vulnerabilities of financial institutions and households to the risks of money laundering and terrorist financing, as well as a methodology for identifying the vulnerabilities of systemically important banks to these risks. As a result of the application of this methodology, three types of risk profiles of Russian banks were identified, their visualization was presented, and the corresponding vulnerability zones were specified. The authors formulated proposals for the mega-regulator of the Russian financial market and for systemically important Russian banks based on the regulation of financial institutions aimed at reducing their vulnerability to risks