CIRR Colloquium: Maria Siranova – The Financial Geography of Illicit Financial Flows

The Development, Security and Justice (DSJ) group warmly invites you to attend the CIRR Colloquium of the Center for International Relations Research (CIRR), where Maria Siranova, visiting professor from the Slovak Academy of Sciences, will present her work.

For online participation use this link: https://meet.google.com/vbh-zzvp-avv

All are welcome, we hope you can join us ! You can find the talk title, abstract, and speaker bio below.

Title
The financial geography of illicit financial flows – the NEO perspective

Abstract
Net errors and omissions (NEOs), the balancing item in international balance-of-payments statistics, are generally treated as a statistical discrepancy (IMF, 2025). However, statistical leakages in the balance of payments have been rather pervasive in the EU economic region (Siranova et al., 2021), with Nordic economies often reporting negative volumes exceeding 10 percent of annual GDP. The evolution of NEOs can be attributed to unrecorded foreign direct investment outflows or misreported trade in services in Slovakia (Siranova and Tiruneh, 2018). They are also associated with higher corporate income taxes and lower institutional quality (Siranova et al., 2021) and affect the external debt sustainability of EU economies (Siranova, 2024). These findings alone dispel the notion of simple “errors” and highlight the need for further investigation into the “omissions” aspect in a global context.

The erratic behaviour of the NEO suggests that a non-negligible part could be attributed to short-term profit-seeking incentives of economic actors that remain hidden from official authorities. As part of a prepared monograph, the talk discusses preliminary findings from a series of exercises building on the “hot capital flows” narrative in a global context. These exercises aim to: (i) uncover global geographical patterns in NEO behaviour; (ii) link the evolution of NEOs to tax havens and financial centres; and (iii) investigate traces of globally driven NEOs in the domestic financial cycle. The analysis employs a range of econometric tools, including panel fixed-effects regressions, bidirectional Granger causality tests, and local projection methods. To achieve the second objective, the “FINNEO” and “TINNEO” indices were developed to measure a country’s NEO-based exposure to tax havens and financial centres.

Preliminary findings suggest that: (i) geographical patterns in NEO behaviour persist but depend on country characteristics; (ii) NEO dynamics can be linked to tax havens and financial centres; and (iii) spillovers to the domestic financial cycle may signal an impending bust phase. These findings support the potential use of NEOs as early-warning indicators of internationally induced capital sudden stops and highlight the importance of improving data transparency and international information exchange on cross-border financial flows.

Bio - Maria Siranova
Maria Siranova studied at the Central European University in Budapest and received her doctorate from the University of Economics in Bratislava. She is a senior researcher at the Institute of Economic Research of the Slovak Academy of Sciences and an associate professor at the Institute of Economics at Comenius University in Bratislava. She serves on the editorial boards of Economic Systems and Journal of Economics (Ekonomický časopis). Her research focuses on empirical monetary economics, international finance—with a particular emphasis on capital flows and macroeconomic imbalances—and financial geography. Her work has been published in journals including Journal of Financial Stability, Journal of Economic Dynamics and Control, and European Financial Management. She has participated in numerous national and international research projects (APVV, VEGA, Horizon 2020, GACR Czechia, NSC Poland, COST Action) and also contributes pro bono as a senior research consultant for the Quantpedia team.