caleb m fundanga : the role of the banking sector in combating money laundering a paper presented by dr caleb m fundanga, governor of the bank of zambia, at a seminar organised by the c and n centre for advanced international studies, lusaka, zambia, 23 january 2003. * * * mr chairman distinguished guests ladies and gentlemen allow me first of all to thank you for inviting me to address you on this topic of great importance to the development of our financial system in zambia – “ the role of the banking sector in combating money laundering ”. i have every reason to believe that your training in the last couple of days has provided an opportunity for you to share with the resource persons valuable insights on the subjects you have covered. mr chairman, the scourge of money laundering is not new to mankind. despite money laundering being topical in policy discussions nowadays and on the minds of supervisors and regulators like the bank of zambia, the scourge itself has a long history and could be as old as the history of organised trade. nonetheless, in spite of the fundamentals of the crime remaining, largely, the same as in the olden days, recent advances in technology and globalisation have offered and will continue to offer more sophisticated means to convert ill - gotten proceeds into legally acceptable financial assets. in recent times, money laundering has grown into real big business. for instance, the economist magazine estimated that about usd 500 billion to usd 1. 5 trillion is laundered through banks each year. further, the financial action task force ( fatf ) - an intergovernmental organization under the auspices of the organisation for economic co - operation and development ( oecd ) also estimates money laundering to be in the ranges of usd 590 billion to us1. 5 trillion. as a percentage of world economic output, money laundering accounts for about 2 % to 5 %. obviously, given the secrecy and the illegal nature of this business, it is difficult to tell exactly the extent of money laundering. nevertheless, these figures give us an indication of the magnitude of the problem. in this regard, financial institutions, in particular, banks provide a conduit through which money ( including laundered money ) flows. because of this, the financial system is the focal point of antimoney laundering initiatives because dirty money is most visible when it is first introduced into the financial system. ladies and gentlemen, before i proceed in discussing the various aspects of money laundering including stages in money laundering, its effects on

of the financial sector. this has been demonstrated by the pensions and insurance authority, the insurers association of zambia as well as securities and exchange commission and the capital markets association of zambia who successfully launched the insurance week under the theme " insurance - solutions for a better tomorrow " and world investor week under the theme " learn more about investor resilience and sustainable finance " earlier this month. i am confident that the key messages disseminated during these events will contribute to raising the levels of financial literacy in the country. be assured that i am committed to supporting the implementation of the national strategy on financial education through such campaigns. ladies and gentlemen the world savings day celebrations would not be successful without recognising individual and organizational contributions towards improving financial literacy in zambia. in this regard, awards will be presented under nine categories namely : 1. exceptional individual contribution to financial education, 2. outstanding theme interpretation ; 3. exceptional leadership in financial literacy ; 4. champions award ; 5. most innovative financial education programme ; 6. outstanding financial literacy footprint ; 7. exceptional financial literacy media outreach ; 8. outstanding initiative by an educator ; and 9. best savings product of the year. i am delighted to grace this year's world savings day award presentation and wish the nominated participants all the best. in conclusion, i would like to thank the organisers and stakeholders under our partnership arrangement, in particular, the bankers association of zambia, securities and exchange commission, pensions and insurance authority, rural finance expansion programme and dsik for their continued support to the world savings day celebrations every year. thank you 3 / 4 bis - central bankers'speeches 4 / 4 bis - central bankers'speeches