For example, they have extensive trading and capital markets activities, and make significant use of over-the-counter derivative instruments and other complex financial products. They are relatively diversified, but also tend to be more highly leveraged than smaller institutions, and often rely on more volatile wholesale funding.
The risk of the use of the financial system for money laundering or terrorist financing is relevant for ECB prudential supervisory decisions on acquisitions of qualifying holdings in supervised entities, granting and withdrawing authorisations to credit institutions, and suitability assessments of existing or prospective managers of supervised entities.