Anti-Money Laundering Game between Banking Institutions and Employees in the Progressing CNY Internationalization

Abstract

Based on the establishment of imperfect dynamic game model of multiple node information sets, the paper analyzes the three equilibrium strategies of banking institutions (BIs) and employees (BEs) under Chinese government’s different anti-money laundering (AML) efforts: both free of AML, BIs involved in AML but BEs away from AML, and both engaged in AML. It finds that Chinese government’s AML effort will impact BIs’ AML choice, and BIs’ AML choice will affect BEs’ AML choice. Only with the effective cooperation among the government, BIs, and BEs can we achieve the AML equilibrium strategy of the two gaming parties.