Game Theory Research On Anti-money Laundering Act In China's Banking Industry

Money laundering is becoming a social problem, and the bank system has became the main channel of money laundering. So the anti-money laundering of bank will play an increasingly important role in maintaining financial stability and protecting the legitimate normal economic order. With January 1, 2007, "The People's Republic of China Anti-Money Laundering Law" and other supporting anti-money laundering laws and regulations were promulgated and implemented, China's anti-money laundering monitoring and analysis system has been gradually improved, the scope of money laundering has been gradually expended, and the effectiveness of anti-money laundering has been significantly improved.In this paper, the author reviews the literature concerning anti-money laundering and previous studies, analyzes the game interests of all parties, and puts forward the process of resolving the anti-money laundering on the "free riding" phenomenon, performance measurement cost allocation, and discussed the relations between the banks an non-bank financial institutions on the policies of anti-money laundering.This paper studies several anti-money laundering game models between the supervisory institution and commercial banks, as follows:Through the cost and benefit analysis of anti-money laundering between the supervisory institution and commercial banks, the author builds static game about market supervisory and non-compliance, obtains the Nash equilibrium, and has made the comparative static analysis of the key factors that affect the game balance. Then, on the basis of game described above, the author discusses the study institutions and demonstration effectiveness during the repeated anti-money laundering game.Appling principal-agent theory, the author builds the incentive and restraint mechanisms of anti-money laundering from the two-person single-stage, two-person multi-stage and n-person game, provides an effective way to solve the moral risks and "free-riding" phenomenon existing in the process of anti-money laundering by designing the optimal incentive factors and performance measurement methods. And then, using the idea of cooperative game, the author provides an effective way to solve the cost-sharing problem which generated from the process of n-bank anti-money laundering.Then, the paper applying multidimensional game theory from the perspective of the financial budget analyzes strategic interaction of the anti-money laundering between bank system and non-bank financial institutions.