Powerful Bank CEOs Lead to Money Laundering

A study shows that the more unchecked authority that bank CEOs have, the more likely that the banks will be involved in money laundering and other criminality.

Obviously, correlation does not prove causation, but ultra-powerful CEOs tend to be indistinguishable from sociopaths, so criminality logically follows their imperative to hit "the numbers".

We have seen again and again how rock-star CEOs lead to unbalanced people running companies for their own personal benefit and twisted egos:

Banks with powerful CEO’s and smaller, less independent, boards are more likely to take risks and be susceptible to money laundering, according to new research led by the University of East Anglia (UEA).

The study tested for a link between bank risk and enforcements issued by US regulators for money laundering in a sample of 960 publicly listed US banks during the period 2004-2015.

The results, published in the International Journal of Finance and Economics, show that money laundering enforcements are associated with an increase in bank risk on several measures of risk. In addition, the impact of money laundering is heightened by the presence of powerful CEOs and only partly mitigated by large and independent executive boards.

It's not just banks that need to abolish the Cult of the CEO.