What is a primary objective of Anti-Money Laundering (AML) regulations?

The primary objective of Anti-Money Laundering (AML) regulations is to prevent and identify 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. AML regulations are designed to deter and detect these illicit activities by requiring financial institutions to implement specific measures—like customer due diligence, transaction monitoring, and reporting suspicious activities.

By prioritizing the prevention and identification of money laundering, AML regulations help ensure the integrity of the financial system and protect it from being manipulated for criminal activities. This objective is crucial for maintaining public trust in financial institutions and upholding the rule of law in the economy.

The other options do not align with the fundamental purpose of AML regulations. Promoting cash transactions would conflict with efforts to trace financial activities, increasing banks' profits is not the direct aim of AML, and simplifying the loan application process is unrelated to preventing financial crimes.