Money laundering research paper

The crime of money laundering is defined as a "financial transaction scheme that aims to conceal the identity, source, and destination of illicitly-obtained money. In money laundering, there are a number of victims.

Money laundering research paper

One of these arguments is that the role of money as a medium of exchange is in conflict with its role as a store of value: The term "financial capital" is a more general and inclusive term for all liquid instruments, whether or not they are a uniformly recognized tender.

Medium of exchange Main article: Medium of exchange When money is used to intermediate the exchange of goods and services, it is performing a function as a medium of exchange.

It thereby avoids the inefficiencies of a barter system, such as the " coincidence of wants " problem. Measure of value Main article: Unit of account A unit of account in economics [26] is a standard numerical monetary unit of measurement of the market value of goods, services, and other transactions.

Also known as a "measure" or "standard" of relative worth and deferred payment, a unit of account is a necessary prerequisite for the formulation of commercial agreements that involve debt.

Money acts as a standard measure and common denomination of trade. It is thus a basis for quoting and bargaining of prices. It is necessary for developing efficient accounting systems. Standard of deferred payment Main article: Standard of deferred payment While standard of deferred payment is distinguished by some texts, [5] particularly older ones, other texts subsume this under other functions.

When debts are denominated in money, the real value of debts may change due to inflation and deflationand for sovereign and international debts via debasement and devaluation. Store of value Main article: Store of value To act as a store of value, a money must be able to be reliably saved, stored, and retrieved — and be predictably usable as a medium of exchange when it is retrieved.

The value of the money must also remain stable over time. Some have argued that inflation, by reducing the value of money, diminishes the ability of the money to function as a store of value. These financial instruments together are collectively referred to as the money supply of an economy.

In other words, the money supply is the number of financial instruments within a specific economy available for purchasing goods or services. Since the money supply consists of various financial instruments usually currency, demand deposits and various other types of depositsthe amount of money in an economy is measured by adding together these financial instruments creating a monetary aggregate.

Modern monetary theory distinguishes among different ways to measure the money supply, reflected in different types of monetary aggregates, using a categorization system that focuses on the liquidity of the financial instrument used as money. The most commonly used monetary aggregates or types of money are conventionally designated M1, M2 and M3.

These are successively larger aggregate categories: M1 includes only the most liquid financial instruments, and M3 relatively illiquid instruments. The precise definition of M1, M2 etc.

Another measure of money, M0, is also used; unlike the other measures, it does not represent actual purchasing power by firms and households in the economy.

Research paper about money laundering

It is measured as currency plus deposits of banks and other institutions at the central bank. M0 is also the only money that can satisfy the reserve requirements of commercial banks.

Money laundering research paper

Creation of money In current economic systems, money is created by two procedures: Legal tender, or narrow money M0 is the cash money created by a Central Bank by minting coins and printing banknotes. Currently, bank money is created as electronic money.

Contrary to some popular misconceptions, banks do not act simply as intermediaries, lending out deposits that savers place with them, and do not depend on central bank money M0 to create new loans and deposits.

Market liquidity "Market liquidity" describes how easily an item can be traded for another item, or into the common currency within an economy.

Money laundering research paper

Money is the most liquid asset because it is universally recognised and accepted as the common currency. In this way, money gives consumers the freedom to trade goods and services easily without having to barter.

Liquid financial instruments are easily tradable and have low transaction costs. There should be no or minimal spread between the prices to buy and sell the instrument being used as money.

Types Currently, most modern monetary systems are based on fiat money. However, for most of history, almost all money was commodity money, such as gold and silver coins. As economies developed, commodity money was eventually replaced by representative moneysuch as the gold standardas traders found the physical transportation of gold and silver burdensome.

Fiat currencies gradually took over in the last hundred years, especially since the breakup of the Bretton Woods system in the early s.

Commodity A British gold sovereign Many items have been used as commodity money such as naturally scarce precious metalsconch shellsbarleybeads etc.Abstract.

Money laundering has been affecting the global economy for many years.


Large sums of money are laundered every year, posing a threat to . This paper examinines the structural, systemic and cultural issues in the UK’s anti-money-laundering regime as it relates to information and intelligence flows to and from the non-financial sectors of legal services, accountancy service providers, property and estate agencies, and trust and company service providers.

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Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts in a particular country or socio-economic context.

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