Detection of financial fraud risk: implications for financial stability

S. M. Riad Shams, Abdus Sobhan, Demetris Vrontis, Zhanna Belyaeva and Darko Vukovic

Abstract

Transparent and competitive financial management policy and practice are, generally, instrumental for local, regional and global financial stability. However, different types of fraudulent financial activities have, from time to time, destabilized global financial stability; we are not well equipped to combat such threats, stabilize the global financial industry and prevent financial fraud in a sustainable way, as the extant literature in this field demonstrates that we have limited knowledge of financial criminology. This introduction to the Journal of Operational Risk special issue shines a light on the relationship between financial fraud risks and financial stability. As well as highlighting the gaps in financial fraud research, we briefly discuss the papers in this special issue. We also offer an in-depth account of the emerging financial fraud risks, and their potential impact on financial stability, as a direction for future research.