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Regulating fraud in financial markets: can behavioural designs prevent future criminal offences?

Author

Listed:
  • Hornuf, Lars
  • Haas, Georg

Abstract

This article explores the anatomy of three recent financial scandals and investigates how the legal system has responded to them. Furthermore, it analyses whether behavioural designs can prevent future criminal offenses. The article comes to the conclusion that the social as well as the physical environment can diminish the human propensity to commit a fraud. Moreover, misconduct was often made attractive to fraudsters by means of external rewards. Reforming performance incentives might therefore be an efficient measure to reduce deception in financial markets.

Suggested Citation

  • Hornuf, Lars & Haas, Georg, 2014. "Regulating fraud in financial markets: can behavioural designs prevent future criminal offences?," Journal of Risk Management in Financial Institutions, Henry Stewart Publications, vol. 7(2), pages 192-201, March.
    • Handle: RePEc:aza:rmfi00:y:2014:v:7:i:2:p:192-201
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    Citations

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    Cited by:

    1. Matthias Fink & Johannes Gartner & Rainer Harms & Isabella Hatak, 2023. "Ethical Orientation and Research Misconduct Among Business Researchers Under the Condition of Autonomy and Competition," Journal of Business Ethics, Springer, vol. 183(2), pages 619-636, March.

    More about this item

    Keywords

    cheating; fraud; behavioural designs; Bernard Madoff; Kweku Adoboli; LIBOR scandal;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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