The evidence presented reinforces the importance of “second best” measures of effectiveness: reputation, suspicious activity reports (SAR); prosecutions; and asset recovery. Reputation to institutions was cited as a reason for absorbing the cost of antimoney laundering compliance, but money laundering did not seem to be an issue of public concern. The rise in the number of SARs has been reflected to some extent through increases in the numbers of both prosecutions and convictions; however they remain at extremely low levels, as does asset recovery. The article states that while much has been made of the risks associated with money laundering, little in-depth work has been undertaken to understand the true extent of the problem, as money laundering is difficult to measure. It notes that an implicit assumption among the regulatory authorities exists that amounts involved are huge; posing a significant threat to the integrity of the financial system and the reputation of domestic financial institutions. The paper also draws attention to problems that the author believes arise from the current focus of money laundering legislation on financial sector compliance, by examining the validity of these "second best" indicators of effectiveness. A preliminary attempt was also made to evaluate the association between money laundering and reputation, looking for evidence of a "virtuous circle of compliance.” The basis for the work was taken from a pilot questionnaire and interviews carried out with financial institutions as well as from statistical data made available by the UK Home Office. Tables, figures, appendices, references