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Money Laundering

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  • First Online:
Encyclopedia of Law and Economics

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Synonyms

Integration; Layering; Placement

Definition

Money laundering is any activity aimed to hid the origin and/or the destination of a flow of money is order to reduce the probability of sanctions.

Only recently the economic analysis has developed a peculiar focus on the financial issues related to the study of crime, thus far completely absent.

In order to describe the economics of money laundering, the starting point is the definition of its microeconomic foundations, which are based on the existence of a rational actor who derives revenues from a criminal activity and from the assumption that his expected utility depends on four key elements: expected revenues, laundering costs, likelihood of being caught, and magnitude of the sanction.

The microbasis of the money laundering can explain its macroeconomic effects. Money laundering can function as a multiplier mechanism of the weight of the illegal sector in a given territory or country. In order to prevent and combat the polluting...

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References

  • Balakina O, D’Andrea A, Masciandaro D (2017) Bank secrecy in offshore centres and capital flows: does blacklisting matter? Rev Financ Econ 32(1):30–57

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  • Barone R, Masciandaro D (2011) Organized crime, money laundering and legal economy: theory and simulations. Eur J Law Econ 32(1):115–142

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  • Dalla Pellegrina L, Masciandaro D (2009) The risk based approach in the new European anti-money laundering legislation: a law and economics view. Rev Law Econ 5(2):932–952

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  • Masciandaro D (1999) Money laundering: the economics of regulation. Eur J Law Econ 7(3):225–240

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Author information

Authors and Affiliations

  1. Department of Economics, Bocconi University and SUERF, Milan, Italy

    Donato Masciandaro

Authors
  1. Donato Masciandaro
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Corresponding author

Correspondence to Donato Masciandaro .

Editor information

Editors and Affiliations

  1. Montpellier, France

    Alain Marciano

  2. Dept DiGSPES, Univ del Piemonte Orientale Dept DiGSPES, Alessandria, Italy

    Giovanni Battista Ramello

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Masciandaro, D. (2021). Money Laundering. In: Marciano, A., Ramello, G.B. (eds) Encyclopedia of Law and Economics. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-7883-6_69-2

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  • DOI: https://doi.org/10.1007/978-1-4614-7883-6_69-2

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  • Publisher Name: Springer, New York, NY

  • Print ISBN: 978-1-4614-7883-6

  • Online ISBN: 978-1-4614-7883-6

  • eBook Packages: Springer Reference Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences

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Chapter history

  1. Latest

    Money Laundering
    Published:
    27 February 2022

    DOI: https://doi.org/10.1007/978-1-4614-7883-6_69-2

  2. Original

    Money Laundering
    Published:
    23 June 2014

    DOI: https://doi.org/10.1007/978-1-4614-7883-6_69-1

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