– The issues of fraud and of “white collar” crime (Savings & Loan, Salomon Brothers)
– National and cultural legal traditions put the emphasis either on the spirit or the letter of the law
– Transparency and “symmetry of information” are necessary for market operations.
– Insider dealing runs counter this (however there is no insider dealing on the commodities markets, why the difference — allowing arbitrage?)
– Profitability is often allowed to prevail against transparency: “dark pools” and high frequency trading are tolerated despite their undermining of transparency
– During the current financial crisis conflict of interest (e.g. the Libor affair) and moral hazard (e.g. socialization of losses) have been rampant
– Changes in the law reflect historical trends, so does evolution of accounting rules
– Has fraud been a cause or an auxiliary factor in the subprime crisis?

Guest lecture by Paul Jorion on Thursday, 25 October, 2012 – 15:00 to 16:30 at Vrije Universiteit Brussel.