Abstract
In this paper the foundations of anti-money laundering regulation are analyzed from an economic viewpoint. The analysis departs from the view that money laundering is a polluting element in financial systems produced by the regular activity of financial institutions. In a latu sensu view it can be viewed as a negative externality that has to be dealt with. The paper shows that the current anti-money laundering regulation is based on a Pigouvian approach although it is known that a Coasian analysis is theoretically superior to deal with law and economic issues. This may help to explain the difficulties that the anti-money laundering regulations are facing to be efficiently applied worldwide. However, the Coasian approach cannot be implemented due to some characteristics of the money laundering. First, it is a derived offence in which is difficult to establish who is the victim. This fact makes almost impossible the creation of a market in which the victims and would negotiate the property rights. Hence, the paper acknowledges that a Pigovian approach although plagged by some difficulties is shown to be the best practice to cope with prevention of money laundering.
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