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The Finanial Action Task Force defines de-risking as:
The phenomenon of financial institutions terminating or restricting business relationships with clients or categories of clients to avoid, rather than manage, risk in line with the FATF’s risk-based approach
The approach towards de-risking is counter-productive to the goals of an anti-money laundering /countering the financing of terrorism (AML/CFT) framework as it encourages the flow of funds via unregulated channels.
Financial institutions should instead manage their risks intelligently on a case-by-case basis rather than taking the shortcut and eliminating the risk wholesale.