Money Laundering as a Crime in the Financial Sector: A New Approach to Quantitative Assessment, with an Application to Italy

2014/11/21 by Guerino Ardizzi, GUERINO ARDIZZI, CARMELO PETRAGLIA +7
Social Sciences · Economics, Econometrics and Finance · #Crime, Illicit Activities, and Governance #Taxation and Compliance Studies #Housing Market and Economics

paper · doi:10.1111/jmcb.12159

Abstract

This study provides an answer to the question of how much cash deposited via a financial institution can be traced back to criminal activities, by developing a new approach to measure money laundering and proposing an application to Italy. We define a model of cash in-flows on current accounts considering, besides “dirty money” to be laundered, also the legal motivations to deposit cash and the role of the shadow economy. We find that the average amount of cash laundered in Italy is around 6% of GDP. These findings are coherent with estimates of the nonobserved economy obtained in previous studies.

Citations

• Shadow Economies: Size, Causes, and Consequences
• What To Do (and Not to Do) with Time-Series Cross-Section Data

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