The Observed Effects of Money Laundering for Jamaica - Caribbean ...

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IV THE EFFECTS OF MONEY LAUNDERING ON THE FINANCIAL SYSTEM AND THE DEMAND FOR MONEY • FINANCIAL SYTEM The growth of money laundering around the world is believed to have varied effects on the economies of the countries which this activity takes place. This section will attempt to do an analysis of the effect of money laundering on the financial sector of Jamaica. Money laundering on the financial system in developing countries poses three effects. These are by increasing the risk of financial sector failure faced by institutions that face the potential risk of being defrauded, the increasing probability that customers of the 34
financial institutions will be defrauded by individuals within the institutions and the probability that the financial institution will be greatly influence or controlled by criminal element. The above mention risk Hussain (undated) noted will played in the financial sector by the money laundering impairs the sustainability and the growth of the financial sector in two ways, these are wreaking the correlation between money laundering and fraudulent activates undertaken by employees in the institution and secondly the Customer trust reflects the level of capital accumulated by these institutions. With the large amount of money that is pumped into the economy through money laundering it is likely that this will have an impact on the financial sector in varied ways. These effects stem from impacting the reputation of the financial sector within an economy, interest rates, expectations and the equity market may be affected directly or indirectly. Hussain (undated) noted that these institutions impetus to furtherance of investment prospects by providing conducive environment and efficient allocation of the resources to investment projects which contributes substantially to economic growth. Therefore if these variables are affected then this will have a negative effect for the long term growth of a country in this case Jamaica. 35
Page 1 and 2: The Observed Effects of Money Laund
Page 3 and 4: The objectives of this paper are to
Page 5 and 6: through an outside party to conceal
Page 7 and 8: larger elements that are easier to
Page 9 and 10: There is a vast amount of literatur
Page 11 and 12: speak of is the impact of money lau
Page 13 and 14: MONEY LAUNDERING IN THE CARIBBEAN:
Page 15 and 16: In the Caribbean the low risks of d
Page 17 and 18: existence of offshore banks and tax
Page 19 and 20: to be used by launderers by Peter L
Page 21 and 22: launderers purchasing the lottery w
Page 23 and 24: productivity and therefore which wi
Page 25 and 26: EMPIRICAL The effects of money laun
Page 27 and 28: the skills necessary for increased
Page 29 and 30: the tau statistic. This test is don
Page 31 and 32: The above results of the p-value ar
Page 33: R-squared 0.413033 Mean dependent v
Page 37 and 38: • DEMAND FOR MONEY 37
Page 39 and 40: The relationship between money laun
Page 41 and 42: R-squared 0.779530 Mean dependent v
Page 43 and 44: Jamaica. The results obtained are c
Page 45 and 46: The goal of this study is to give a
Page 47 and 48: Recently the Jamaican Government ha
Page 49 and 50: money laundering which is not deeme
Page 51 and 52: Bartlett, B.L. (2002). “The Negat
Page 53: Unger, B., Seigal, M., Ferwerd, J.,

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