Study reveals impact of powerful CEOs and money laundering on bank performance

Banks with powerful CEOs and smaller boards are more likely to take risks and be susceptible to money laundering.The study tested for a link between bank risk and enforcements issued by US regulators for money laundering in almost 1,000 publicly listed US banks.The results show that money laundering enforcements are associated with an increase in bank risk. The impact of money laundering is heightened by the presence of powerful CEOs and only partly mitigated by large and independent executive boards.