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

Filippo Curti & Atanas Mihov

Review of Corporate Finance Studies2025https://doi.org/10.1093/rcfs/cfaf027article
AJG 3ABDC A*
Weight
0.37

Abstract

Little is known about fraud in the financial services sector. Using a rich supervisory data set, this study dissects fraud at large U.S. banking organizations. We find that the impact of fraud extends beyond direct monetary costs. Severe tail fraud events lead banks to significantly reduce loan growth, with effects more pronounced at institutions with weaker capital and liquidity positions. We further document that tail fraud shocks are associated with tighter loan contract terms, even after controlling for borrower risk. These credit supply effects ultimately transmit to the real economy through reduced corporate investment among affected banks’ borrowers. Our analysis provides new detailed evidence on fraud in the U.S. financial services industry and its costs and consequences.

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https://doi.org/https://doi.org/10.1093/rcfs/cfaf027

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@article{filippo2025,
  title        = {{Catch the Thief! Fraud in the U.S. Banking Industry}},
  author       = {Filippo Curti & Atanas Mihov},
  journal      = {Review of Corporate Finance Studies},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1093/rcfs/cfaf027},
}

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

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Evidence weight

0.37

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.16 × 0.4 = 0.06
M · momentum0.53 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.