Wilmott, Volume 2012, Issue 60, pages 28-37, July 2012
10 Pages Posted: 26 Apr 2014 Last revised: 6 Apr 2017
Date Written: September 27, 2012
The financial industry is at the heart of our economy and fittingly comes under much scrutiny. Indeed, as a result of social and political pressure, particularly since the recent subprime crisis, more rigorous regulations have been imposed on both “authorized firms” and “approved persons” via the SEC and the FSA. It is hoped that these restrictions will continue to secure fair and honest practices within the industry, as well as restoring the public’s confidence in bankers.
This article will outline one risk that institutions like the SEC and the FSA have not regulated heavily enough but must address promptly if trust in them is to be preserved. This is the Unfortunate cosT Of Pattern rEcognition (UTOPE), technically known as apophenia.
Keywords: Psychology, Apophenia, Unfortunate cosT Of Pattern rEcognition, UTOPE, Behavioural Finance
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