Economic Analysis Of The Financial Institutions, Money-laundering

The objective of this paper is to illustrate the effectiveness of anti-money laundering which a financial institution conducts with considering costs and benefits. That's to say, I use some economic theories and methods to analyze the costs and benefits in anti-money laundering. In fact, it's a new branch of the studying anti-money laundering. As the cost of regulation rises, the level of financial institutions'acceptability to conduct anti-money laundering declines, which implies an alteration in structure of incentives . In other words, the bottom of the financial institutions is that they will accept such acceptability to the regulation. And such regulation is conducted by government or central banking of one country. Hence, the cost of anti-money laundering regulation for financial institutions(commercial banks) must be weighed against the gains expected from regulation, so that the final net result is a decrease of money laundering. 2Therefore, the work is set out as follows:Preface The brief introduction to the situation of money laundering and anti-money laundering of present china.Chapter One Theory of money laundering and anti-money laundering. This chapter mainly tells us the definition, characters, course and ways of money laundering.Chapter Two An economic analysis to anti-money laundering on considering costs and benefits, including externalities analysis, game theory analysis, information economic analysis and so on. Through such analyses, we can know more about the work of anti-money laundering.