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Results for money laundering (italy)

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Author: Ardizzi, Guerino

Title: Money Laundering as a Financial Sector Crime - A New Approach to Measurement, with an Application to Italy

Summary: Anti–money laundering regulations have been centred on the “Know-Your-Customer” rule so far, overlooking the fact that criminal proceedings that need to be laundered are usually represented by cash. This is the first study which tries to provide an answer to the question of how much of cash deposited via an official financial institution can be traced back to criminal activities. The paper develops a new approach to measure money laundering and then proposes an application to Italy, a country where cash is still widely used in transactions and criminal activities generate significant proceeds. In particular, we define a model of cash in-flows on current accounts and proxy money laundering with two indicators for the diffusion of criminal activities related to both illegal trafficking and extortion, controlling also for structural (legal) motivations to deposit cash, as well as the need to conceal proceeds from tax evasion. Using a panel of 91 Italian provinces observed over the period 2005-2008, we find that the average total size of money laundering is sizable, around 7% of GDP, 3/4 of which is due to illegal trafficking, while 1/4 is attributable to extortions. Furthermore, the incidence of “dirty money” coming from illegal trafficking is higher in the Centre-North than in the South, while the inverse is true for money laundering coming from extortions.

Details: Munich, Germany: Center for Economic Studies (CES), the Ifo Institute and the CESifo GmbH (Munich Society for the Promotion of Economic Research), 2013. 30p.

Source: Internet Resource: CESifo Working Paper No. 4127: Accessed February 27, 2013 at: http://www.cesifo-group.de/ifoHome/publications/working-papers/CESifoWP/CESifoWPdetails?wp_id=19076139

Year: 2013

Country: Italy

URL: http://www.cesifo-group.de/ifoHome/publications/working-papers/CESifoWP/CESifoWPdetails?wp_id=19076139

Shelf Number: 127738

Keywords:
Extortion
Financial Crimes
Illegal Trafficking
Money Laundering (Italy)
Shadow Economy
White Collar Crime