About Lesson
Anti Money Laundering (AML) refers to a number of regulations, laws, and procedures that aim to prevent criminals from disguising their illegally obtained money as legitimate income. AML procedures make it much harder for criminals to “launder” their money clean by hiding it or disguising it as coming from legitimate sources.
Criminals will always look for ways to conceal the true source of their funds. Due to the complexity of the financial markets, there can be many different ways to do that. Derivatives products made up of derivatives products, and other complex market machinations can make tracing the true source of funds quite difficult (though not impossible).
AML regulations require financial institutions such as banks to monitor the transactions of their customers and report on suspicious activity. This way, criminals are less likely to get away with laundering illegally obtained funds.