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Time: 11:53 am

Results for usury

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Author: Barone, Raffaella

Title: Crime, Money Laundering, and Credit Markets: Can Usury Exist at the Zero Lower Bound?

Summary: In advanced economies, the recent collapse of interest rates to the Zero Lower Bound (ZLB) has triggered a series of research questions on how to navigate the new zero interest credit environment. Focusing on illegal markets, it is possible to explain why usury still remains widespread after the legal nominal interest rate has fallen to zero. If the lender is a criminal agent with money-laundering aims, the ZLB isn't an obstacle to design and implement usury contracts. Using a dynamic model of usury for a loan having a variable interest rate and the value of the borrowing firm itself as collateral it is possible to show that notwithstanding the ZLB the criminal actor can be able achieve the money laundering purpose by expropriating the borrower of his/her collateral.

Details: Milan, Italy: BAFFI CAREFIN Centre, Bocconi University, 2017, 2017. 19p.

Source: Internet Resource: BAFFI CAREFIN Centre Research Paper No. 61: Accessed November 9, 2017 at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3053818

Year: 2017

Country: International

URL: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3053818

Shelf Number: 148087

Keywords:
Financial Crimes
Illegal Markets
Money Laundering
Usury