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Money Laundering as a Crime in the Financial Sector: A New Approach to Quantitative Assessment, with an Application to Italy
Author(s) -
ARDIZZI GUERINO,
PETRAGLIA CARMELO,
PIACENZA MASSIMILIANO,
SCHNEIDER FRIEDRICH,
TURATI GILBERTO
Publication year - 2014
Publication title -
journal of money, credit and banking
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.763
H-Index - 108
eISSN - 1538-4616
pISSN - 0022-2879
DOI - 10.1111/jmcb.12159
Subject(s) - money laundering , cash , shadow (psychology) , financial institution , institution , business , financial sector , finance , financial system , accounting , economics , monetary economics , law , political science , psychology , psychotherapist
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.