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

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  • Lucia Dalla Pellegrina
  • Giorgio Di Maio
  • Donato Masciandaro
  • Marherita Saraceno

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 riskbased mechanism of reporting suspicious operations to the FIU.

Suggested Citation

  • Lucia Dalla Pellegrina & Giorgio Di Maio & Donato Masciandaro & Marherita Saraceno, 2018. "Detecting the Fifty Shades of Grey: Local Crime, Suspicious Transaction Reporting and Anti-Money Laundering Regulation," BAFFI CAREFIN Working Papers 1893, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    • Handle: RePEc:baf:cbafwp:cbafwp1893
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    Cited by:

    1. Lucia Dalla Pellegrina & Giorgio Di Maio & Donato Masciandaro & Margherita Saraceno, 2020. "Are Bankers "Crying Wolf"? The Risk-Based Approach to Money-Laundering Regulation and its Effects," Working Papers 444, University of Milano-Bicocca, Department of Economics, revised Feb 2021.

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    More about this item

    Keywords

    Money laundering; Suspicious transaction reporting; Vulnerability;
    All these keywords.

    JEL classification:

    • K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law
    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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