The adoption of a risk-based approach is therefore central to the effective implementation of the FATF Recommendations at the national level, be it by policy makers, supervisors, law enforcement authorities and regulated entities, amongst others. One may ask about the reasons underlying such a change in approach to AML/CFT. The reasons are simple:   First of all, this approach is more flexible.
These investors clearly had a financial incentive to do better due diligence on the subprime risks they were taking on, but they largely failed to do so. We can only speculate as to why this was the case.