What cost does society at large pay for the 15% bite on people laundering money? How many legitimate transactions are made more expensive, or never begun at all, because of AML regulations?
Terrorism, sex trafficking, drug trafficking, organised crime etc. All are predominately financed through activities which depend on some form of money laundering. And the cost to society there is not measured in money but in lives, despair, suffering etc.
All these things still exist in spite of AML laws and there's no evidence that AML laws meaningfully reduce the amount of them occurring.
But it is a fact that those crimes depend on money laundering in order to extract proceeds. And it is a fact that AML laws help law enforcement to identify the financial flows linked to money laundering.
The lens through which to look at is what level of enforcement/AML do we need to reduces societal harm cost effectively. Because you can't track every object that enters or every dollar that leaves.
So the question is more whether reducing the harms of drug consumption that amount is worth the impact on legitimate business. Then again the merits AML is that it hits most organized crime and costs a lot less than specific enforcement to stop trafficking and distribution. Now with fentanyl, you can't reasonable prevent trafficking at any cost because 5 tonnes can supply the entire USA, so you have to turn other the screws
Besides, KYC also helps recovering money from your run of the mill scams and fraud. The kind of thing that makes victims every day, so I don't think anybody here puts a negative value on it.
Vanishingly few, I'd say? You're asking that in a rhetorical sense: "Ah, but you didn't think about this did you? That invalidates your point."
But your question is a real one with a quantitative answer. And in fact AML statutes exist (or don't) in lots of different markets in the real world, and were introduced at different times. You can look at the macroeconomics if you want and try to puzzle out the effect.
And really there is none. Western capitalism was going gangbusters through the whole period in the 20th century where cash flow tracking was being introduced. And contemporary regimes that resisted AML introduction (c.f the famous swiss bank account) really didn't grow any faster or slower.
I personally know businesses owners who ceased operations because the laws around dealing with cash in quantity became too troublesome.
We can't be sure why, it is a very political question. The idea that western powers should control 70% of the world economy is certainly questionable. But something that the west has been doing has killed off growth and put it in a relatively weak position. Corruption of the banking industry away from making good investments and towards supporting government policy objectives is a candidate for contributing to that. It's gotten to the point where as far as I can tell the US has capital controls in place because foreign banks won't take US customers. Not an American so I might just be wrong on that point I suppose.
[0] https://ourworldindata.org/grapher/gdp-world-regions-stacked...
The ideological bent on HN threads really has gotten a little out of control in recent years. We're literally in a topic where the bulk of the posting volume is from the "money laundering is good, actually" camp.
And it isn't KYC/AML laws doing that in isolation because it is too big a trend and too much happens over a century. But "Western capitalism was going gangbusters through the whole period in the 20th century where cash flow tracking was being introduced." - no it wasn't. Western capitalism has been slowly mean-reverting to fall in line with all the authoritarian states and tinpot dictatorships. The economic strategy that the west has been using does not seem to be creating vast amounts of wealth in the west. Most of the wealth is being created in Asia.
And big investments take 20-30 years to pay off, so we're probably seeing the results of policies from 1940 through to around 2000 in that chart.
Although I'll say again that the whole thing is intensely political and I doubt there is any consensus on what just happened in the last 50 years beyond China is building stuff and the US is not.
What's the cost of all these restaurant owners doing all banks every day?