Abstract
Trade-based Money Laundering, a new form of money laundering using international trade as a signboard, always appears along with speculative capital movement which has been accepted as the most concerned and consensus incentive giving rise to the collapse of the financial market. Unfortunately, preventing money laundering is very difficult since money laundering always has a plausible trade characterization. To reach this goal, supervision for regulator and financial institutions aims to effectively monitor micro entities’ behavior in financial markets. The main purpose of this paper is to establish a monitoring method including accurate recognition and classified supervision for Trade-based Money Laundering by means of knowledge-driven multi-class classification algorithms associated with macro and micro prudential regulation, such that the model can forecast the predicted class from the concerned management areas. Based on empirical data from China, we demonstrate the application and explain how the monitor method can help to improve management efficiency in the financial market.
Highlights
Cross-border capital frequent flow, which is used as arbitrage in financial markets, is most harmful to the financial market and economics of emerging markets and developing economics (EMDEs)
The Trade-based Money Laundering (TBML) is seriously concerned by emerging markets and developing economics (EMDEs) and has turned into a dominating issue because of laundering funds with higher frequent cross-border capital fluctuations, which have been acknowledged as being the cause of the Southeast Asia financial crisis in 1998
This paper aims to develop a framework for managing TBML based on data mining which begins by constructing data feature selection, and multi-class labels which are designed by means of knowledge-driven experiences under macro and micro-prudential management
Summary
Cross-border capital frequent flow, which is used as arbitrage in financial markets, is most harmful to the financial market and economics of emerging markets and developing economics (EMDEs). Many accelerating global capital flows and financial market failures require financial market regulation for reasons of export reduced, unemployment and economic stagnation in developing countries. The TBML is seriously concerned by emerging markets and developing economics (EMDEs) and has turned into a dominating issue because of laundering funds with higher frequent cross-border capital fluctuations, which have been acknowledged as being the cause of the Southeast Asia financial crisis in 1998
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