1,142 research outputs found
Towards Transparency in Finance and Governance
The study of transparency is increasingly a more topical, broadly relevant, but also more under-researched enterprise. The Asian financial crisis has highlighted not only the welfare consequences of financial sector transparency, sparking a series of yet unresolved debates, but has also linked this relatively narrow problem to the broader context of transparency in governance. Its significance has broadened geographically as well as across different sectors. It has been observed that curtailment of transparency, often on scanty pretexts, is commonplace even in the highly developed countries. This suggests a broad and possibly radical reform agenda. Departing from the urgency of these observations, this paper reviews the existing literature on transparency in finance and governance, indicates remaining knowledge gaps, and offers some hypothesis on the mutual significance of the two issues. The first two sections of the paper outlines a conceptual framework for defining and measuring transparency that distinguishes among its desirable characteristics; access, timeliness, relevance, and quality. It also suggests methodologies that may produce tractable measures of transparency. Additionally, it places in context debates concerning transparency; its desirability, contingency, complexity and regulation. Reviewing critiques of objections against disclosure, the chapter advances a general preference for transparency, not only in the developing but also in the developed world. Nevertheless, it emphasizes the need to weigh the costs and benefits of more transparency in designing regulatory policy. In general, while consequences of information imperfections are well recognized, the solution is not simply a matter of more information. The third section treats the role of transparency in promoting greater financial stability, acknowledging exceptions to the general preference expressed earlier, in relation to financial stability. It treats as priority policy issues the following problems: developing institutional infrastructure, developing standards and accounting practices, improving incentives for disclosure and balancing countervailing regulations to minimize perverse incentives generated by safety net arrangements such as deposit insurance. An important suggestion is that since institutional development is gradual, relatively simple regulations such as limits on credit expansion, may be best tailored to developing countries. Implicit in this section is the notion that there are absolute limits to transparency, in particular for lack of adequate enforcement. The last section elaborates on the concomitant link between financial markets and governance, discussing select consequences of transparency for national-level and local governance, identifying some policy implications and suggesting further research issues. As illustrated by the case of Indonesia, it argues that financial reform may be predicated on broader public sector reforms. Again, because formal institutions take time to develop, it highlights three principles of reform to promote incentives for openness: harnessing private sector participation in service provision, promoting exit and contestability, and encouraging "voice" and public participation. These are now increasingly being integrated to new innovative data collection and analysis techniques, and to particular dissemination methods promoting collective action to improve governance and enhance transparency. The chapter concludes by outlining the difficulties of implementing greater participation and voice.financial liberalization, transparency, corruption, governance, banking crisis, asymmetric information, local investors, shocks, bad loans, emerging markets
Essays on the Rationality of Online Romance Scammers
The rapid development of the internet has served an essential role in providing communication platforms for people to choose to have personal interactions. One manifestation is using social media platforms and dating services to establish social relationships. The use of online platforms has also provided unscrupulous individuals with malicious intent the ability to target vulnerable victims using bogus romantic intent to obtain money from them. This type of newly evolved cybercrime is called an online romance scamming. To date, online romance scams have spread to every part of the world (i.e., mainly in the United States, China, Canada, Australia, and the UK) and caused considerable financial and emotional damage to victims.
Prior research on online romance fraudsters provides a preliminary understanding of the operational features (stages and persuasive techniques) and their modus operandi. However, the objectivity and relevance of the victimization data in explaining offenders\u27 behaviors may render those studies may represent significant drawbacks. To overcome the limitations, it is important to use actual offender data to generate meaningful analyses of romance fraudsters\u27 behaviors. Consequently, this dissertation aims to use experimental data similar to that applied in my previous work (Wang et al., 2021), combined with existing criminological and communication theories, to promote a better understanding of romance fraudsters\u27 behaviors in the online world.
This dissertation begins with a scoping review of the current online romance scam literature, intending to use a scientific strategy to address the existing scholarly gap in this field of research. Derived from rational choice theory, the criminal events perspective, interpersonal deception theory, and neutralization theory, the second and third paper uses an experimental approach to assess the influence of rewards on romance fraudsters\u27 behaviors. The three papers\u27 results demonstrate the rationality of online romance fraudsters when facing rewards. Moreover, such rationality can be explicitly seen from their uses of different linguistic cues. Finally, the outcomes provided in the current project also provide policymakers the information about the rationality and modus operandi of fraudsters which can be used to identify the behavioral patterns at an early phase to prevent significant harm to the victim
Fintech and the Innovation Trilemma
Whether in response to roboadvising, artificial intelligence, or crypto-currencies like Bitcoin, regulators around the world have made it a top policy priority to supervise the exponential growth of financial technology (or fintech ) in the post-Crisis era. However, applying traditional regulatory strategies to new technological ecosystems has proven conceptually difficult. Part of the challenge lies in the tradeoffs involved in regulating innovations that could conceivably both help and hurt consumers and market participants alike. Problems also arise from the common assumption that today\u27s fintech is a mere continuation of the story of innovation that has shaped finance for centuries.
This Article provides a novel theoretical framework for understanding and regulating fintech by showing how the supervision of financial innovation is invariably bound by what can be described as a policy Trilemma. Specifically, we argue that when seeking to provide clear rules, maintain market integrity, and encourage financial innovation, regulators have long been able to achieve, at best, two out of the three goals. Moreover, today\u27s innovations exacerbate the tradeoffs historically embodied in the Trilemma by either reconfiguring or disintermediating traditional financing operations and the discrete services supporting them, thereby introducing unprecedented uncertainty as to their risks and benefits. This Article thus proceeds to catalogue the strategies taken by regulatory authorities to navigate the Trilemma, and posits them as operating across a spectrum of interrelated responses. It then proposes supplemental administrative tools to support not only market, but also regulatory data gathering and experimentation
Do Automated Trading Systems Dream of Manipulating the Price of Futures Contracts? Policing Markets for Improper Trading Practices by Algorithmic Robots
This Article seeks to determine if the CFTC needs new tools to combat disruptive, manipulative, or otherwise harmful trading practices that originate solely from the âmindsâ of ATSs. Part I of this Article provides a brief regulatory background of the derivatives markets, then examines the increased automation in those markets today, and concludes by looking at the CFTCâs initial responses to the issues raised by automation. Part II briefly looks at the law concerning different mental states for causes of action. Part III examines the CFTCâs pre and post-DoddâFrank Act tools to police disruptive and manipulative trading practices, which are causes of action that, generally speaking, have scienter or culpable mental state requirements. This makes these tools ineffective in situations where none of the prospective defendants acted with the requisite mental state.
Part IV analyzes the failure-to-supervise cause of action under CFTC Regulation 166.3. It determines that this regulation potentially could be an effective weapon against ATS-initiated behavior that disrupts or manipulates derivative markets because: (1) a Regulation 166.3 claim does not require proof of an underlying violation of the CEA or CFTC Regulations, and (2) decisions analyzing Regulation 166.3 appear to apply a reasonableness standard (as opposed to a scienter requirement) in scrutinizing whether a firm diligently supervised its employees and agents in connection with its business as a CFTC registrant. More specifically, although never explicitly stated, Regulation 166.3 violation decisions appear to apply a reasonableness standard that analyzes whether a reasonably prudent registrantâas opposed to a reasonably prudent personâwould have acted the same in similar circumstances. Part IV also suggests that, to ensure that Regulation 166.3 will effectively deter disruptive and manipulative trading practices by registrantsâ ATSs, the CFTC could promulgate a rule making clear that a registrantâs duty to diligently supervise its employees in connection with its business as a registrant includes making sure that employees monitor ATSs for improper trading practices.
This Article is the first to: (1) suggest that Regulation 166.3 is most likely the best tool for combatting improper trading practices by ATSs where no human connected to the activities had the requisite scienter; (2) contend that Regulation 166.3 uses a reasonableness standard that is best viewed as a reasonably prudent registrant (as opposed to a reasonably prudent person) standard for diligence in connection with supervisory duties; and (3) point out that this standard establishes, as a baseline, mandatory awareness of requirements in the CEA and applicable CFTC and self-regulatory organization (SRO) rules and guidelines
Systemic Racism and COVID-19: Vulnerabilities with the U.S. Social Safety Net for Immigrants and People of Color
America has a mythologized reputation as an accommodative âmelting potâ nation that welcomes individuals from all races and countries seeking improved quality of life and reduced material hardship. However, our U.S. social welfare system is more broadly characterized as underdeveloped, restrictive, and exclusionary, especially toward immigrants and people of color. Public health benefits (e.g., Medicaid), food assistance programs (e.g., SNAP), rental assistance (e.g., HCV/Section 8), and cash assistance (e.g., TANF) are oftentimes restricted for immigrants and racial minorities, making them more vulnerable to material hardship and more exposed to pandemic conditions under COVID-19. Moreover, these welfare restrictions are oftentimes rooted in negative social construction and unflattering stereotypes of Black and Latine people. This paper connects deliberately racialized social welfare barriers, developed under the banner of âwelfare reformâ in the 1990s, to contemporary difficulties accessing benefits by minority groups, and subsequently heightened vulnerabilities around COVID-19. We suggest areas for improvement in social welfare policy development to better address systemic racism and COVID-19, and deepening inequalities from lack of access to the social safety net for immigrants and racial minorities in the U.
Do Automated Trading Systems Dream of Manipulating the Price of Futures Contracts? Policing Markets for Improper Trading Practices by Algorithmic Robots
This Article seeks to determine if the CFTC needs new tools to combat disruptive, manipulative, or otherwise harmful trading practices that originate solely from the âmindsâ of ATSs. Part I of this Article provides a brief regulatory background of the derivatives markets, then examines the increased automation in those markets today, and concludes by looking at the CFTCâs initial responses to the issues raised by automation. Part II briefly looks at the law concerning different mental states for causes of action. Part III examines the CFTCâs pre and post-DoddâFrank Act tools to police disruptive and manipulative trading practices, which are causes of action that, generally speaking, have scienter or culpable mental state requirements. This makes these tools ineffective in situations where none of the prospective defendants acted with the requisite mental state.
Part IV analyzes the failure-to-supervise cause of action under CFTC Regulation 166.3. It determines that this regulation potentially could be an effective weapon against ATS-initiated behavior that disrupts or manipulates derivative markets because: (1) a Regulation 166.3 claim does not require proof of an underlying violation of the CEA or CFTC Regulations, and (2) decisions analyzing Regulation 166.3 appear to apply a reasonableness standard (as opposed to a scienter requirement) in scrutinizing whether a firm diligently supervised its employees and agents in connection with its business as a CFTC registrant. More specifically, although never explicitly stated, Regulation 166.3 violation decisions appear to apply a reasonableness standard that analyzes whether a reasonably prudent registrantâas opposed to a reasonably prudent personâwould have acted the same in similar circumstances. Part IV also suggests that, to ensure that Regulation 166.3 will effectively deter disruptive and manipulative trading practices by registrantsâ ATSs, the CFTC could promulgate a rule making clear that a registrantâs duty to diligently supervise its employees in connection with its business as a registrant includes making sure that employees monitor ATSs for improper trading practices.
This Article is the first to: (1) suggest that Regulation 166.3 is most likely the best tool for combatting improper trading practices by ATSs where no human connected to the activities had the requisite scienter; (2) contend that Regulation 166.3 uses a reasonableness standard that is best viewed as a reasonably prudent registrant (as opposed to a reasonably prudent person) standard for diligence in connection with supervisory duties; and (3) point out that this standard establishes, as a baseline, mandatory awareness of requirements in the CEA and applicable CFTC and self-regulatory organization (SRO) rules and guidelines
Strategies for Improving Correspondent Banking Cross-Border Remittances
Over $25 billion have been levied against banks annually in recent years for infractions and noncompliance with cross-border regulations. Huge costs affect banks\u27 performance, and implementing working strategies that reduce significant costs is valuable. This single case study using systems theory was designed to explore strategies that bank leaders with correspondent banking relationships adapt to reduce costs from penalties and fines in cross-border remittances.Through the process of methodological triangulation, data collected from internal policy and procedural documents supplemented data collected from semistructured interviews. Yin\u27s 5-step qualitative data analysis process of compiling, disassembling, reassembling, interpreting, and concluding was applied to collected data. Emergent themes included developing distinctive cost-reduction strategies, creating unique local bank strategies for an effective cross-border payment system, and using technology as a vital tool to reduce sanction costs. The study may support positive social change affecting individuals, communities, and society by increasing the success of cross-border payments through reduction in the costs of sanctions. Recipients of cross-border remittances benefit from the inflow of funds to cover basic needs such as medicines, education, and living expenses. Governments also benefit in terms of taxes and banks through commissions. The findings from this study may also assist society by supporting efforts to stop illicit international financial flows and combat the financing of terrorism
Trust and exchange : the production of trust in illicit online drug markets
Au cours de la derniĂšre dĂ©cennie, les marchĂ©s illicites en ligne sont passĂ©s de niches de marchĂ©s Ă plateformes Ă©conomiques Ă part entiĂšre. Lâun des aspects de cette expansion semble reposer dans lâabandon de lâarticulation traditionnelle de la relation de confiance entre vendeurs et acheteurs pour lâadoption de transactions rĂ©gies par les principes dâatomisation sociale et dâanonymat. Se situant au cĆur dâune sociologie Ă©conomique des marchĂ©s illicites encore Ă©mergente, cette thĂšse cherche donc Ă Ă©tudier lâĂ©laboration de la confiance au sein des marchĂ©s de drogues illicites en ligne.
En mâappuyant sur la notion dâinstitutions en tant que constructions sociales, j'avance la thĂšse selon laquelle ces marchĂ©s illicites modernisent les modalitĂ©s de transaction des marchĂ©s licites traditionnels : des contrats sont proposĂ©s ; des tribunaux sont Ă©rigĂ©s; la sanction est formalisĂ©e ; et la gouvernance est transformĂ©e. Cette approche permet de rĂ©vĂ©ler un schisme fondamental de la littĂ©rature et de ses postulats Ă lâĂ©gard de l'ordre social rĂ©gnant au sein des marchĂ©s illicites en ligne -- rupture qui sâexprime notamment par lâopposition entre 1) une conception de ces marchĂ©s comme socialement atomisĂ©s et rĂ©gis uniquement par la rĂ©putation ; et 2) lâidĂ©e selon laquelle les serveurs restent sous le contrĂŽle des administrateurs.
Afin de pallier cette discordance, je propose un modĂšle dâĂ©laboration de la confiance notamment issu des approches cognitives et comportementales. PremiĂšrement, je soutiens qu'un ensemble de mĂ©canismes actifs de renforcement remplace fonctionnellement les principes sociaux traditionnels de la confiance. DeuxiĂšmement, je soutiens que la confiance, aussi bien interpersonnelle quâabstraite (Ă savoir, la confiance accordĂ©e aux institutions), est principalement produite selon un processus bayĂ©sien d'accumulation d'expĂ©riences.
Dans cette perspective, l'article « Uncertainty and Risk » examine l'ensemble des mĂ©canismes actifs de renforcement de la confiance -- premiĂšre composante de ce modĂšle -- et rĂ©vĂšle que les vendeurs ajustent les prix non seulement en fonction de la rĂ©putation, mais Ă©galement des contrats et du statut. Dans les articles suivants, le processus bayĂ©sien d'accumulation d'expĂ©riences -- deuxiĂšme partie du modĂšle -- est abordĂ©. LâĂ©tude menĂ©e dans lâarticle « Building a case for trust » met ainsi en lumiĂšre une association entre les Ă©changes rĂ©pĂ©tĂ©s avec le vendeur et une tendance Ă effectuer des transactions de plus en plus importantes. Le troisiĂšme article (« A change of expectations? »), quant Ă lui, met en exergue le fait quâun faible nombre dâexpĂ©riences satisfaisantes suffit Ă augmenter la certitude de lâacheteur quant Ă la qualitĂ© du produit illicite. Dans leur ensemble, ces deux articles soutiennent lâidĂ©e selon laquelle le processus d'accumulation d'expĂ©riences favorise la coopĂ©ration et les attentes.
Enfin, ce travail sâachĂšve par lâarticulation des deux composantes de ce modĂšle et, de maniĂšre plus gĂ©nĂ©rale, par lâarticulation de la thĂšse de la modernisation et dâune conception de la confiance dont lâĂ©laboration repose sur un processus dâaccumulation dâexpĂ©riences sociales. Lâapport unique d'une sociologie Ă©conomique dans lâĂ©tude criminologique des marchĂ©s illicites est notamment soulignĂ© et des pistes de recherches futures sont discutĂ©es.During the last decade illicit online drug markets have grown from niche markets into full-fledged platform economies. It seems that over the course of a few years, sellers and buyers have left the social bases of trust behind preferring to exchange under conditions of social atomization and anonymity. Situated in an emerging economic sociological approach to illicit markets, this work examines the production of trust in illicit online drug markets.
Drawing on economic sociology, namely, the notion of institutions as social constructions, I advance the thesis that these markets modernize the premodern exchange modes of traditional illicit markets: Contracts are implemented; courts are erected; sanctions are formalized; and governance transforms. This analysis reveals a fundamental schism in the literature and its assumptions about the social order of illicit online markets. Specifically, a conception of these markets as socially atomized and governed only by reputation, versus the recognition that servers remain under the control of administrators.
Building off the modernization thesis and the schism, I propose a model for the production of trust that is sensitive to both cognitive and behavioral approaches to trust. First, I propose that a set of active trust producing mechanisms functionally replace the bases of trust that have eroded as illicit markets move online. Second, I argue that trust is primarily produced through a Bayesian process of accumulating experience, which produces both interpersonal and abstract trust.
In the article Uncertainty and Risk I examine the first component, the active production of trust. I revisit a key debate in the literature, the pricing of illicit goods. We find that sellers set prices adjust prices not only with respect to reputation, but also contracts and status. In the following two articles, I examine the second part of the model, the bayesian process of experience accumulation. In the article Building a Case for Trust, I find that repeated exchanges with a seller are associated with a propensity towards larger transactions. In the third article, A Change of Expectations?, I find that even a few experiences increases expectations in the performance of the market institution. Thus, the two articles provide evidence that the process of experience accumulation promotes cooperation and expectation.
I conclude the work by reconciling a tension between the two components of the model, the proposition that markets are modernized, but that trust is produced primarily through a process of experience accumulation. On this basis, I continue to highlight the contributions and analytical advantages of the economic sociological approach to illicit markets
- âŠ