Applying the Information about the Involvement of a Bank Borrower in Money Laundering when Managing Credit Risk

Abstract

The article deals with the problem of lack of due attention to the risk of laundering illegal income when assessing the borrower’s credit risk and provides the analysis of the use of procedures in the management of credit risk by banks in order to counter the legalization of illegal income. The author substantiates the use of the results of assessing the money laundering risk in the assessment of the borrower’s creditworthiness. A hypothesis about the influence of the turnover ratio of the stocks of a commercial enterprise on making doubtful and suspicious operations by the client is generated. The author proves that the inventory turnover ratio can be used as a sign of the organization’s involvement in the laundering of illegal revenues when analyzing the borrower’s creditworthiness if the borrower is engaged in wholesale business. Improving the quality of the borrower’s creditworthiness is an important direction in ensuring the stability of the banking sector and the economy as a whole. The proposals presented in the article are practically oriented and require further development.

Keywords

• creditworthiness of the borrower
• the risk of laundering illegal income
• inventory turnover ratio
• overdue debt
• credit risk
• wholesale
• aml/cft internal control