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Financial Fraud and Credit Risk: Illicit Practices and Their Impact on Banking Stability

Author

Listed:
  • Mohd Afjal

    (VIT Business School, Vellore Institute of Technology, Vellore 632014, India)

  • Aidin Salamzadeh

    (College of Management, University of Tehran, Tehran 141556311, Iran)

  • Léo-Paul Dana

    (Faculty of Management, Dalhousie University, Halifax, NS B3H 4R2, Canada)

Abstract

The intricate relationship between financial fraud and credit risk, and their combined impact on banking stability, is a vital and under-researched aspect of financial system integrity. To fill this knowledge gap, this study embarked on a thorough bibliometric analysis of the field, utilizing 2790 documents from various sources, including 1853 articles, 504 books, and 177 reviews, spanning the years 1990 to 2023. Utilizing advanced tools, like Biblioshiny and VOSviewer, this study illuminated key geographical, thematic, and intellectual trends, shedding light on an annual growth rate of 13.43% in the related literature and an average citation per document of 28.29. This detailed analysis offered valuable insights into the current research landscape, emphasizing areas such as author collaboration, with 20.32% international co-authorships, and the prevalence of single-authored documents, at 1100. Despite the existing body of research, the interconnected dynamics between financial fraud and credit risk and their implications for banking stability remain underexplored. Therefore, this study sought to unravel this complex relationship and examine its effects at both the micro (individual banks) and macro (banking sector and wider economy) levels. The findings carry significant practical implications, informing policy development, shaping risk management strategies, and contributing to regulatory measures. Despite its limitations, including the potential transformation of identified trends due to evolving financial systems and financial crimes, this study represents a significant contribution to scholarly discourse in the field. It lays the groundwork for future research and facilitates a more secure and resilient banking sector, reflecting the data-driven insights obtained from the research.

Suggested Citation

  • Mohd Afjal & Aidin Salamzadeh & Léo-Paul Dana, 2023. "Financial Fraud and Credit Risk: Illicit Practices and Their Impact on Banking Stability," JRFM, MDPI, vol. 16(9), pages 1-29, August.
    • Handle: RePEc:gam:jjrfmx:v:16:y:2023:i:9:p:386-:d:1228461
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    References listed on IDEAS

    as
    1. Mr. Luc Laeven & Mr. Fabian Valencia, 2010. "Resolution of Banking Crises: The Good, the Bad, and the Ugly," IMF Working Papers 2010/146, International Monetary Fund.
    2. Laeven, Luc & Majnoni, Giovanni, 2003. "Loan loss provisioning and economic slowdowns: too much, too late?," Journal of Financial Intermediation, Elsevier, vol. 12(2), pages 178-197, April.
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    8. Caprio, Gerard & Honohan, Patrick, 2001. "Finance for Growth: Policy Choices in a Volatile World," MPRA Paper 9929, University Library of Munich, Germany.
    9. Demirgüç-Kunt, Asli & Detragiache, Enrica, 2005. "Cross-Country Empirical Studies of Systemic Bank Distress: A Survey," National Institute Economic Review, National Institute of Economic and Social Research, vol. 192, pages 68-83, April.
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    Cited by:

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    2. Zhengrong Yang & Shoaib Ali & Wei Tao & Hehong Chen, 2024. "From Transactions to Transformation: Exploring the Impact of Blockchain on Customer Financial Well-being," SAGE Open, , vol. 14(2), pages 21582440241, June.

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