Table of Contents

Research Handbook on Money Laundering

Research Handbook on Money Laundering

Elgar original reference

Edited by Brigitte Unger and Daan van der Linde

Although the practice of disguising the illicit origins of money dates back thousands of years, the concept of money laundering as a multidisciplinary topic with social, economic, political and regulatory implications has only gained prominence since the 1980s. This groundbreaking volume offers original, state-of-the-art research on the current money laundering debate and provides insightful predictions and recommendations for future developments in the field.

Chapter 24: Dirty complexity: money laundering through derivatives

John Biggins

Subjects: economics and finance, economic crime and corruption, law - academic, corruption and economic crime, politics and public policy, terrorism and security


Trading in financial derivatives has increased exponentially in recent decades. This is especially true with respect to over-the-counter (OTC) derivatives. Given the relative opacity, complexity and size of the derivatives markets (particularly the OTC segments) they may be hospitable breeding grounds for money laundering. From the turn of the twenty-first century up to the global financial crisis (GFC) originating in 2007, trading in OTC derivatives between sophisticated market participants in some of the largest markets was not substantially directly regulated. Amongst other things, this generated concerns with respect to the integrity of audit trails in these markets (FATF 1999, p. 13;hereinafter 1999 FATF Report). In the wake of the GFC, proposals for regulatory reform in OTC derivatives market infrastructure have been forthcoming in many jurisdictions. Amongst developed economies, the US, in particular, has made notable progress at time of writing.

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