Detecting the Fifty Shades of Grey: Local Crime, Suspicious Transaction Reporting and Anti-Money Laundering Regulation

37 Pages Posted: 15 Nov 2018

See all articles by Lucia Dalla Pellegrina

Lucia Dalla Pellegrina

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS)

Donato Masciandaro

Bocconi University - Department of Economics

Giorgio Di Maio

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS)

Margherita Saraceno

University of Pavia - Department of Law

Date Written: November 2018

Abstract

This paper investigates the efficiency of the suspicious transaction reporting (STR) activity to the Financial Intelligence Unit (FIU) as a means to deter money laundering. A baseline theoretical model is used as a framework to guide the empirical analysis of the relationship between STR and the vulnerability of Italian provinces to money laundering in the 2008-2013 period. Instrumental variables are used to limit the problems stemming from the endogenous nature of the number of reports to the FIU with respect to vulnerability. Results provide a positive assessment of the risk-based mechanism of reporting suspicious operations to the FIU.

Keywords: Money laundering; Suspicious transaction reporting; Vulnerability

JEL Classification: K14; K20; K42

Suggested Citation

Dalla Pellegrina, Lucia and Masciandaro, Donato and Di Maio, Giorgio and Saraceno, Margherita, Detecting the Fifty Shades of Grey: Local Crime, Suspicious Transaction Reporting and Anti-Money Laundering Regulation (November 2018). BAFFI CAREFIN Centre Research Paper No. 2018-93. Available at SSRN: https://ssrn.com/abstract=3280307 or http://dx.doi.org/10.2139/ssrn.3280307

Lucia Dalla Pellegrina

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milan, 20126
Italy

Donato Masciandaro (Contact Author)

Bocconi University - Department of Economics ( email )

Via Gobbi 5
Milan, 20136
Italy

Giorgio Di Maio

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milan, 20126
Italy

Margherita Saraceno

University of Pavia - Department of Law ( email )

Pavia, I-27100

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