Page 54 - Banking Finance May 2024

ARTICLE

Technology is Moving Fast: The internet and new tech problem and we need to stop them as soon as possible.
make it easy for bad guys to hide their money through new These new methods use the internet, like digital currencies
methods, like using digital currencies or online games. and online games, to move money around without getting
caught. These sneaky ways of moving money are hard to
Money Moves Easily Across Countries: Our world's spot and stop because they're happening so fast and across
financial systems are all connected, making it simple for different countries. This means the people and groups who
criminals to move money through different countries. They try to stop money laundering need to work even harder and
often use complicated setups like shell companies and smarter. Stopping these new methods quickly is very
accounts in other countries, which are hard to follow once important. Enforcement agencies need to use new tools and
the money goes international. work together better across countries to catch and stop
these criminals. This way, we can keep our money safe and
Old Tools Aren't Enough: The usual tools and methods
make sure it's harder for criminals to launder money.
investigators use are based on specific rules. Clever criminals
know how to work around these rules, so their money
References
moves look normal, making it tough for banks and other
1. https://ww3.rics.org/
places to spot the bad activity.
2. https://www.grcworldforums.com/
There's Just Too Much Data: With so many money 3. https://www.amlc.eu/online-games-and-money-
transactions happening every day, especially in big financial laundering/
centres, it's really hard for investigators to spot the 4. https://www.linkedin.com/pulse/trade-based-money-
suspicious ones by just looking at them one by one. laundering-how-prevent
5. https://pideeco.be/
Conclusion: 6. https://syntheticdrugs.unodc.org/

Modern ways of hiding illegal money are becoming a big 7. https://personable.com/

Monetary policy expectations impact stocks more than rate
moves: RBI

Equity markets are impacted more by the expectations of future monetary policy than the policy rate surprises on the
day of announcement of the policy by the Reserve Bank, said an analysis. According to a working paper prepared by
RBI officials, the regulatory and development measures which are announced along with the monetary policy too
impact the stock markets.
"...equity markets are affected more by the changes in the market's expectations of future monetary policy (path
factor) than the policy rate surprise (target factor) which is in agreement with the conventional thinking that equity
markets are forward-looking," the RBI said.
The volatility in equity markets on the day of policy announcement, it said, "is affected by both target and path factors,
as markets digest the policy announcements and traders adjust their portfolios throughout the day". RBI Working
Paper on 'Equity Markets and Monetary Policy Surprises' is prepared by Mayank Gupta, Amit Pawar, Satyam Kumar,
Abhinandan Borad and Subrat Kumar Seet from Department of Economic and Policy Research, Reserve Bank of India.
The paper analyses the impact of monetary policy announcements on the returns and volatility in the BSE Sensex by
decomposing changes in Overnight Indexed Swap (OIS) rates on policy announcement days into target and path factors.
The target factor captures the surprise component in central bank policy rate action, while the path factor captures
the impact of central bank's communication on market expectations regarding the future path of monetary policy.
While the short duration windows are aimed at controlling for other potential drivers of equity prices, it may be
noted that the monetary policy announcements are accompanied by regulatory and developmental measures which
can also impact markets, the RBI said.

48 | 2024 | MAY | BANKING FINANCE