Compliance landscape in central and eastern Europe – the case of Hungary
| Pages | 325-333 |
| Published date | 02 October 2017 |
| Date | 02 October 2017 |
| DOI | https://doi.org/10.1108/JMLC-11-2016-0046 |
| Author | Levente Kovács,Sandor David |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
Compliance landscape
in central and eastern
Europe –the case of Hungary
Levente Kovács
Hungarian Banking Association, Budapest, Hungary and
Department of Economic Relations, University of Miskolc, Miskolc, Hungary, and
Sandor David
Hungarian Banking Association, Budapest, Hungary
Abstract
Purpose –This paper aims to explore how the understanding of the concept of compliance as its own risk
category and the role of compliance as a separate internal banking function developed during the central and
eastern European (CEE) region’s restoration of the banking systems, both parallel to and as a part of their transition
process from their centrally plannedeconomies to market economies, with spe cial focus on the case of Hungary.
Design/methodology/approach –The paper discusses the transition within CEE and the reconstruction
of their banking systems, including that of money and the capital market and the law-abidingness of the banking
sector, the role of its reputation, compliance and customer relationships, compliance after 2005, the Bank of
International Settlement principles and their implementation, a Hungarian compliance survey conducted in 2009
and future challenges in the fieldof compliance.
Findings –There is still not a globally or continentallyaccepted “best”practice in the field of compliance. It
is under these circumstancesthat banking systems must face the challenges of this new epoch of increasing
migrationand cybercrime.
Originality/value –This paper presents the development of compliance in CEE, with special focus on
Hungary. The articlewas written by employees of the Hungarian Banking Association, put togetherwith the
help of thevast experience they gained throughout theircareers in the banking sector.
Keywords Terrorist financing, Compliance, Compliance function in banks, Ethics in banks
Paper type General review
Abbreviations
AML = Anti-Money Laundering
BIS = Bank of International Settlement
CEE = Central and eastern Europe
NBH = The National Bank of Hungary
HFSA = Hungarian Financial Supervisory Authority
EU = European Union
ECB = European Central Bank
MiFID = Markets in Financial Instruments Directive
PSD = Payment Services Directive
SEPA = Single Euro Payments Area
JEL classification –G29
Compliance
landscape
325
Journalof Money Laundering
Control
Vol.20 No. 4, 2017
pp. 325-333
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-11-2016-0046
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