Exploring the nexus: macroeconomic factors and reported money laundering cases – a cross-sectional analysis in Sri Lanka

Abstract

In today's global landscape, money laundering and terrorist financing present formidable challenges. This study investigates potential correlations between Sri Lanka's macroeconomic factors—specifically GDP, Foreign Direct Investment (FDI)—and reported money laundering cases. Leveraging qualitative data from the Central Bank of Sri Lanka (CBSL) and employing linear regression analysis, the research adopts a qualitative approach to unravel the nuanced connections between economic conditions and financial crimes. The primary purpose of this research is to identify and understand the relationships between Macroeconomic Factors and Reported Money Laundering Cases. The findings hold the potential to provide valuable insights for policymakers, financial institutions, and law enforcement, contributing to the development of more effective anti-money laundering strategies and policies tailored to Sri Lanka's unique context. The anticipated findings aim to shed light on the intricate interplay between GDP, FDI, and money laundering instances, offering a deeper understanding of the challenges faced by Sri Lanka. Such insights could pave the way for more informed decision-making in combating financial crimes. The implications of this study extend beyond academia, with practical applications for shaping policies and strategies that address the specific dynamics of money laundering in Sri Lanka.