Abstract
Illegal activities of financial intermediaries: A burden of trust crisis
Highlights
In the history of development economics, shadow banking has been thought of as a key factor in increasing anxiety and negative sentiments about many countries' current financial and economic position, especially OECD
This paper explores the influence of the trust crisis in the financial sector on financial intermediaries' illegal activities, enabling to describe the logic behind the increasing involvement of financial banking and non-banking financial institutions in shadow transactions
Futuremore, trust crisis in the financial sector do have a significant influence on financial sector deformations (α = 0,603, T-statistics = 2,380, p < 0,050), and the latter on illegal activities of financial intermediaries (α = 0,832, T-statistics = 9,285, p < 0,050)
Summary
In the history of development economics, shadow banking has been thought of as a key factor in increasing anxiety and negative sentiments about many countries' current financial and economic position, especially OECD It is well established from a variety of studies that in the majority of cases, shadow banking is linked to corruption, institutions quality, and money laundering that resulted in the run-up to national and global economic and financial crises. The identified research gap is linked to the lack of knowledge regarding the underlying root causes for financial intermediaries' engagement in illegal activities This undertaken study aims to make an original contribution to research by exploring and measuring the link between trust crisis in the financial sector and illegal activities of financial intermediaries.
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