In banking regulations, what does AML stand for?

In the context of banking regulations, AML stands for Anti-Money Laundering. This refers to the laws, regulations, and procedures that financial institutions and certain other businesses must follow to detect and prevent money laundering activities. Money laundering is the process of concealing the origins of illegally obtained money, typically by passing it through a complex sequence of banking transfers or commercial transactions.

The significance of AML measures lies in their role in safeguarding the financial system from being used for criminal activities, such as drug trafficking or terrorism financing. Financial institutions are required to implement AML policies, which often include customer due diligence, monitoring of transactions, and reporting suspicious activities to authorities. Proper implementation of AML regulations helps maintain the integrity of the banking system and fosters public trust in financial institutions.