Regulating the Externality of Money Laundering - Halfway There

13 Pages Posted: 1 Mar 2019

Date Written: February 28, 2019

Abstract

Present regulation and recent research regarding the externality problem of money laundering focus on the banks and other financial institutions as being the causes of money laundering and objects of regulation. Focusing on the financial institutions only creates a void, where the clients of these institutions can act without direct regulatory restrictions. Based on the definition of money laundering as presented in the fourth anti-money laundering directive of the European Union, this article analyzes the externality problem of money laundering. The article argues that the regulation is insufficient, because it only addresses the production side of the externality problem and does not include the consumption side of the externality problem. The result is that the regulation does not include all the parties relevant to the prevention and combating of money laundering.

Keywords: money laundering, regulation, externality problem, law and economics

Suggested Citation

Rose, Kalle Johannes, Regulating the Externality of Money Laundering - Halfway There (February 28, 2019). Copenhagen Business School, CBS LAW Research Paper No. 19-12. Available at SSRN: https://ssrn.com/abstract=3344469 or http://dx.doi.org/10.2139/ssrn.3344469

Kalle Johannes Rose (Contact Author)

Copenhagen Business School - CBS Law ( email )

Porcelaenshave 18B, 1
Frederiksberg 2000
Denmark

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