Catch the Thief! Fraud in the U.S. Banking Industry

68 Pages Posted: 8 Mar 2020

See all articles by Filippo Curti

Filippo Curti

Federal Reserve Banks - Federal Reserve Bank of Richmond

Atanas Mihov

Federal Reserve Bank of Richmond

Date Written: September 1, 2019

Abstract

Little is known about fraud in the financial services sector. Using a rich supervisory dataset, this study dissects fraud at large U.S. banking organizations. We examine the different categories of fraud and their materiality, the recovery from fraud, the time from fraud occurrence to fraud discovery and accounting. We quantify exposure to fraud and study the determinants of fraud at the banking organization level. Lastly, we document a significant effect of fraud on bank credit intermediation. Overall, our analysis provides new, detailed evidence on fraud in the U.S. financial services industry, and its costs and consequences.

Keywords: Banking; Bank Holding Companies; Fraud; Operational Risk; Credit Intermediation

JEL Classification: G21, G28, G29

Suggested Citation

Curti, Filippo and Mihov, Atanas, Catch the Thief! Fraud in the U.S. Banking Industry (September 1, 2019). Available at SSRN: https://ssrn.com/abstract=3535934 or http://dx.doi.org/10.2139/ssrn.3535934

Filippo Curti

Federal Reserve Banks - Federal Reserve Bank of Richmond ( email )

P.O. Box 27622
Richmond, VA 23261
United States

Atanas Mihov (Contact Author)

Federal Reserve Bank of Richmond ( email )

530 East Trade Street
Charlotte, NC 28202
United States

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