, in south america through gafisud, as well as with initiatives at the national level such as those developed by the central bank of argentina together with my colleagues in the region. as a result of increasing capital mobility and the ongoing development of new means of payment, and given their complex nature, these crimes directly hit the financial system. however, we are aware that they affect the financial system in a somewhat different way compared to traditional criminal activities. therefore, prevention, combat and follow - up actions must be addressed differently. money laundering has both macroeconomic and microeconomic implications that may corrupt financial, legal and even political structures. in macroeconomic terms, it generates market volatility and instability with systemic effects on the financial system and on monetary developments. money laundering may also have effects on the formation of asset prices bubbles, due to the fact that informal money becomes available to acquire different types of assets, real estate in particular. on the microeconomic side, it distorts competition, originating unfair business practices and the creation of shell organizations. it also involves higher transaction costs and promotes other illegal activities. faced with these types of crimes, in its capacity of overseer of the financial system required to report transactions, the central bank of argentina has developed an active policy aimed at both regulating financial institutions activity and improving supervision based upon the new applicable international standards. as you all know, argentina does have anti - money laundering legislation that is being amended in order to fully comply to the financial action task force ( fatf ) and gafisud recommendations concerning banking, tax and professional secrecy, among other issues. in addition to actively working on the legislative arena, the central bank has focused its efforts on updating its regulatory framework for financial institutions. as an example we recently have updated regulation on the following : - identification of usual and occasional customers and definition of specific identification requirements for each type of customer. - special identification standards for politically exposed individuals. - special tracking of non face - to - face transactions. - special attention to be paid to identify account holders ( individual or corporate ) in cases of suspicion that they are acting on behalf of third parties ( trusts, corporate vehicles ) - specific definition of internal control responsibilities by creating a money laundering control and prevention committee and by assigning specific responsibilities to each financial and foreign exchange institution ’ s internal auditor and human resources area. - design and implementation of mechanisms to control and monitor customer operations and to adopt gradual risk analysis policies. - definition of criteria to create and maintain

ardian fullani : the link between the legal system and financial markets speech by mr ardian fullani, governor of the bank of albania, at the banking law workshop, tirana, 17 november 2008. * * * dear everyone, the conviction that two monologues do not make a dialogue not only pushed me to study law after my economics studies but also to listen to and toss ideas with colleagues from different professions. i find it especially pleasing when i do this with lawyers, given that there is one particular person i talk to the most – my spouse. the dialogue between the banking market and the legal system has always been important to any country. nowadays, it has become extremely vital. for our country to continue sailing towards safe shores of economic development, financial stability and prosperity, i believe these two oars are required : judicial order and the financial market. dwelling briefly on the legislation issues, i would highlight that the economic activity is mutually dependent on the legal system at home. as one of the distinguished economists and academics, mr. mishkin, says – ” the legal system, which as you know, is not only composed of legislation and rule books, but also of the infrastructure of the civil courts and the market regulators, represents a fundamental determinant of economic growth, especially in connection to financial development ”. the link between law and finance is inextricable. the financial instruments do not operate in a vacuum. as long as they serve to people, they are based on legal relationships. a financial asset is ultimately a claim in the form of paper ( contract ) or electronic form ( account entry ). in any credit relationship, the possibility of default is always looming and this inherent complication cannot be solved without a precise system of norms that protects both the creditors and the debtors. as shakespeare ’ s merchant of venice reminds us, the legal system has to ensure that the debtor does not walk away from his obligation. at the same time, the lender cannot be too taxing for the debtor. hence, as anywhere else in life, the balance ( that is, the balance of justice ) should provide for the wellbeing of the financial system, which is based on these classical relationships, no matter how much modern they are. fundamentally, the legal system should ensure that contract and property rights are sufficiently clear, protected and predictable. in more concrete terms, the parties should not only be aware of these rights, but also exercise them freely and fully during the binding