Determinants of banks' risk exposure to new account fraud - Evidence from Germany
This paper studies empirically the determinants of new account fraud risk within two dimensions: the probability of fraud, and the expected and unexpected (monetary) loss-per-account due to fraud. By fraud risk, we mean the risk that a bank fails to enforce a debt because the identity of the person incurring the debt cannot be ascertained. Using a unique and rich data set of account applicants, provided by a German Internet-only bank, we find that fraud risk is highly sensitive to demographic and socio-economic variables like nationality, gender, marital status, age, occupation, and urbanisation. For example, foreigners are 22.25 times more likely to commit account fraud than Germans, and men are 2.5 times more risky than women.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Heckman, James, 2013.
"Sample selection bias as a specification error,"
Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
- Edward L. Glaeser & Bruce Sacerdote, 1996.
"Why is There More Crime in Cities?,"
Harvard Institute of Economic Research Working Papers
1746, Harvard - Institute of Economic Research.
- Alan Krueger & Jorn-Steffen Pischke, 1996.
"A Statistical Analysis of Crime Against Foreigners in Unified Germany,"
737, Princeton University, Department of Economics, Industrial Relations Section..
- Alan B. Krueger & Jörn-Steffen Pischke, 1997. "A Statistical Analysis of Crime against Foreigners in Unified Germany," Journal of Human Resources, University of Wisconsin Press, vol. 32(1), pages 182-209.
- Alan B. Krueger & Jorn-Steffen Pischke, 1996. "A Statistical Analysis of Crime Against Foreigners in Unified Germany," NBER Working Papers 5485, National Bureau of Economic Research, Inc.
- Alan B. Krueger & Jorn-Steffen Pischke, 1995. "A Statistical Analysis of Crime Against Foreigners in Unified Germany," Working papers 95-15, Massachusetts Institute of Technology (MIT), Department of Economics.
- Schmit, Mathias, 2004. "Credit risk in the leasing industry," Journal of Banking & Finance, Elsevier, vol. 28(4), pages 811-833, April.
- Charles M. Kahn & William Roberds, 2005.
"Credit and identity theft,"
Conference Series ; [Proceedings],
Federal Reserve Bank of Boston.
- Gary S. Becker, 1974.
"Crime and Punishment: An Economic Approach,"
in: Essays in the Economics of Crime and Punishment, pages 1-54
National Bureau of Economic Research, Inc.
- Mark Carey, 1998. "Credit Risk in Private Debt Portfolios," Journal of Finance, American Finance Association, vol. 53(4), pages 1363-1387, 08.
- Edward E. Glaeser & Bruce Sacerdote & Jose A. Scheinkman, 1995.
"Crime and Social Interactions,"
Harvard Institute of Economic Research Working Papers
1738, Harvard - Institute of Economic Research.
- Jacobson, Tor & Roszbach, Kasper, 1998.
"Bank Lending Policy, Credit Scoring and Value at Risk,"
Working Paper Series
68, Sveriges Riksbank (Central Bank of Sweden).
- Jacobson, Tor & Roszbach, Kasper, 2003. "Bank lending policy, credit scoring and value-at-risk," Journal of Banking & Finance, Elsevier, vol. 27(4), pages 615-633, April.
- Jacobson, Tor & Roszbach, Kasper, 1998. "Bank Lending Policy, Credit Scoring and Value at Risk," SSE/EFI Working Paper Series in Economics and Finance 260, Stockholm School of Economics.
- Ehrlich, Isaac, 1973. "Participation in Illegitimate Activities: A Theoretical and Empirical Investigation," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 521-65, May-June.
- Jacobson, Tor & Linde, Jesper & Roszbach, Kasper, 2006.
"Internal ratings systems, implied credit risk and the consistency of banks' risk classification policies,"
Journal of Banking & Finance,
Elsevier, vol. 30(7), pages 1899-1926, July.
- Jacobson, Tor & Lindé, Jesper & Roszbach, Kasper, 2003. "Internal Ratings Systems, Implied Credit Risk and the Consistency of Banks’ Risk Classification Policies," Working Paper Series 155, Sveriges Riksbank (Central Bank of Sweden).
- Robert DeYoung, 2005. "The Performance of Internet-Based Business Models: Evidence from the Banking Industry," The Journal of Business, University of Chicago Press, vol. 78(3), pages 893-948, May.
- Lance Lochner & Enrico Moretti, 2004.
"The Effect of Education on Crime: Evidence from Prison Inmates, Arrests, and Self-Reports,"
American Economic Review,
American Economic Association, vol. 94(1), pages 155-189, March.
- Lance Lochner & Enrico Moretti, 2001. "The Effect of Education on Crime: Evidence from Prison Inmates, Arrests, and Self-Reports," NBER Working Papers 8605, National Bureau of Economic Research, Inc.
- Carbó Valverde Santiago & Massoud Nadia & Rodríguez-Fernández Francisco & Saunders Anthony & Scholnick Barry, 2007.
"The Economics of Credit Cards, Debit Cards and ATMs: A Survey and Some New Evidence,"
201074, Fundacion BBVA / BBVA Foundation.
- Scholnick, Barry & Massoud, Nadia & Saunders, Anthony & Carbo-Valverde, Santiago & Rodríguez-Fernández, Francisco, 2008. "The economics of credit cards, debit cards and ATMs: A survey and some new evidence," Journal of Banking & Finance, Elsevier, vol. 32(8), pages 1468-1483, August.
- Fajnzylber, Pablo & Lederman, Daniel & Loayza, Norman, 2002. "Inequality and Violent Crime," Journal of Law and Economics, University of Chicago Press, vol. 45(1), pages 1-40, April.
- George A. Akerlof, 1997. "Social Distance and Social Decisions," Econometrica, Econometric Society, vol. 65(5), pages 1005-1028, September.
- Vermilyea, Todd A. & Webb, Elizabeth R. & Kish, Andrew A., 2008. "Implicit recourse and credit card securitizations: What do fraud losses reveal?," Journal of Banking & Finance, Elsevier, vol. 32(7), pages 1198-1208, July.
When requesting a correction, please mention this item's handle: RePEc:eee:jbfina:v:33:y:2009:i:2:p:347-357. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.