Anti-Money Laundering Enforcement, Banks, and the Real Economy

Senay Agca, Pablo Slutzky and Stefan Zeume
Additional contact information
Senay Agca: George Washington University
Pablo Slutzky: University of Maryland
Stefan Zeume: University of Illinois at Urbana Champaign

Working Papers from The George Washington University, Institute for International Economic Policy

Abstract: We exploit a tightening of anti-money laundering (AML) enforcement that imposed disproportionate costs on small banks to examine the effects of a change in bank composition on real economic outcomes. In response to intensified enforcement, counties prone to high levels of money laundering experience a departure of small banks and increased activity by large banks. This results in an increase in the number of small establishments and real estate prices. Consistent with a household demand channel, wages and employment increase in the non-tradable sector. Last, we document secured lending as a potential driver of this outcome.

Keywords: Money laundering; Financial Institutions; Real economy; Deposits and lending; Financial crime (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Pages: 63 pages
Date: 2021
New Economics Papers: this item is included in nep-ban, nep-cba and nep-fdg
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:gwi:wpaper:2021-20

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