Stress and Substitution: A Theory of Opaque-Capital Allocation under Macro-Financial Pressure; Germany Illustration with Public-Data Validation

Stress and Substitution: A Theory of Opaque-Capital Allocation under Macro-Financial Pressure; Germany Illustration with Public-Data Validation | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Stress and Substitution: A Theory of Opaque-Capital Allocation under Macro-Financial Pressure; Germany Illustration with Public-Data Validation Konstantinos Likas This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-9294634/v1 This work is licensed under a CC BY 4.0 License Status: Under Review Version 1 posted 6 You are reading this latest preprint version Abstract This paper develops a dynamic theory of opaque-capital allocation in which macro-financial stress reallocates laundering activity across channels instead of uniformly increasing it. Two agent types choose among formal intermediation,vehicle-based intermediation, and liquid opaque storage, withendogenous congestion and adjustment costs. The key result is that stress pushes activity toward channels with higher opacity and liquidity whentheir stress loadings exceed those of formal finance. Using German public data, stress is measured by the Bundesbank 10-year minus 2-year Bundslope over 2005-01-03 to 2025-12-30 and aggregated to a quarterly path for 2010Q1–2025Q4. From 2010Q2 to 2023Q3, the calibrated model lowers the formal-channel share by 18.0 percentage points and raises the cash/liquid share by 24.8 points. FIU and BaFin evidence is supportive but proxy-based, so the empirical material validates the mechanism rather than directly measuring laundering volume. JEL: D91, E44, G28, K42 money laundering macro-financial stress yield curve channel substitution suspicious activity reports Germany Full Text Additional Declarations Competing interest reported. The author is employed by Deutsche Bank AG as a Regulatory Control Senior Advisor. The views expressed in this manuscript are solely those of the author and do not necessarily reflect the views of Deutsche Bank AG or any affiliated institution. The author declares no direct financial conflict in relation to the specific results reported in this study. Cite Share Download PDF Status: Under Review Version 1 posted Reviewers agreed at journal 08 Apr, 2026 Reviewers agreed at journal 06 Apr, 2026 Reviewers invited by journal 03 Apr, 2026 Editor assigned by journal 03 Apr, 2026 Submission checks completed at journal 03 Apr, 2026 First submitted to journal 01 Apr, 2026 You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. 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Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-9294634","acceptedTermsAndConditions":true,"allowDirectSubmit":false,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":619835405,"identity":"cfa2b867-02ed-48fe-8dc7-9cc1dedcb903","order_by":0,"name":"Konstantinos Likas","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAABAUlEQVRIiWNgGAWjYBACCRiDDUwWSBgwMDAfkCao5QCQhmgxAGlhSyBOC4RrAIQMPAZ4tUi29x7+/KHmTh2fdPPhDwwGFsb8/Wc+3i5gsJPTbcCuRZrnXJrEgWPPJNhkjqVJAB1mJnEjd7P1DIZkY7MD2LXISeSYMRxgOyzBBmIAtdgw3ODdJs3DcCBxG24txh8O/ANrMf4A0iJ//swzvFqkJXIMJA62gbUYgB1mcCCHDa8WyZ4zZhJn+w5LtkmkpUkkGEgYG95IM7aeYYDbLxLHe4w/VHw7zC8/I/nwhw8VdYbzzh9+eLugwk4OlxZUkABnGRCjfBSMglEwCkYBLgAApl5UT/pki4UAAAAASUVORK5CYII=","orcid":"","institution":"Deutsche Bank (Germany)","correspondingAuthor":true,"prefix":"","firstName":"Konstantinos","middleName":"","lastName":"Likas","suffix":""}],"badges":[],"createdAt":"2026-04-01 16:55:11","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-9294634/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-9294634/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":106483175,"identity":"404fa85d-fe66-44c5-bbdf-8e509ae88e1f","added_by":"auto","created_at":"2026-04-09 05:26:10","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":387162,"visible":true,"origin":"","legend":"","description":"","filename":"ManuscriptUNMARKED.pdf","url":"https://assets-eu.researchsquare.com/files/rs-9294634/v1_covered_e42950e5-1e93-4d78-ae54-29c960a4f787.pdf"}],"financialInterests":"Competing interest reported. The author is employed by Deutsche Bank AG as a Regulatory Control Senior Advisor. The views expressed in this manuscript are solely those of the author and do not necessarily reflect the views of Deutsche Bank AG or any affiliated institution. 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