The Operation And Structure Of The International Financial System

818 Words Oct 9th, 2016 4 Pages
The operation and structure of the international financial system in an increasingly globalized world has received considerable attention from all economists worldwide throughout its existence. This study addresses two additional important and core fundamentals of the financial system: corruption and money laundering. These two elements are global issues and affect all countries causing considerable and irrevocable damages to society in various ways. The society has witnessed a number of cases involving money laundering recently and has also experienced the negative effects of terrorist financing. Unfortunately, there can never be one system, which completely rules out money laundering and terrorist financing crimes from penetrating financial entities.

Starting with, factors such as the business sector, the types of business activity, economic opportunities and the political environment are likely to drive the levels of corruption. It is important to mention here that there are two types of corruption: the petty corruption and the grand corruption. Petty corruption is the one faced by citizens and private sector on a daily basis to acquire basic services. However, grand corruption is the one that takes place at the upper reaches of society involving the political environment, public officials etc. Grand corruption involves millions of dollars in contrast to petty corruption. This is the reason why is considered to be the type of corruption that has the greatest impact on…

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