PRESS-NEWS.org - Press Release Distribution
PRESS RELEASES DISTRIBUTION

Stricter oversight needed as financial misconduct drives risk-taking in banking

2025-03-30
(Press-News.org) Banks facing regulatory sanctions for financial misconduct tend to adopt riskier business practices, according to new research.

The authors warn repeated or systemic misconduct can accelerate risk-taking in ways that weaken both individual institutions and the wider financial system.

Researchers from the University of East Anglia (UEA), the US Department of the Treasury and Bangor University, in the UK, drew on data from nearly 1,000 publicly listed US banks from 1998 to 2023 - a period spanning multiple economic cycles including the 2007–09 financial crisis.

Their findings, published today in the Journal of Banking & Finance, show that banks referred to authorities for violations - ranging from misrepresentation to failures in anti-money-laundering systems - are significantly more likely to engage in risk-heavy strategies and speculative lending.

Board characteristics can make a difference, with larger and more independent boards, particularly those with older or gender-diverse membership, often dampening the negative impact of misconduct. However, if CEOs hold extensive power or if short-term focused institutional investors hold large stakes, even robust boards may struggle to rein in risky behaviour.

Dr Yurtsev Uymaz from UEA’s Norwich Business School said: “We show that enforcement actions and class-action lawsuits against US banks are linked to increased levels of bank risk-taking. Even one enforcement action correlates with higher risk; for banks facing multiple actions, the effect can be markedly stronger.

“There appears to be no deterrent effect from the fact that banks facing multiple actions experience even higher risk.”

Banks play a foundational role in fuelling economic growth. The study authors, including Prof John Thornton of Norwich Business School and the US Department of the Treasury, and Prof Yener Altunbaş of Bangor University, warn unethical conduct that fuels risk-taking can reverberate widely, potentially undermining key forms of credit or amplifying systemic instabilities.

Commenting on the implications for policymakers and stakeholders, such as investors and the public, Dr Yurtsev Uymaz said: “Our findings underscore how lapses in ethical conduct can open the door to riskier practices. This doesn’t just affect a bank’s own stability; it ripples out into the wider economy.

“At the same time, we see that strong governance - embodied in larger, more diverse boards - can help reduce the adverse impacts of misconduct. However, these safeguards can be undermined if CEOs wield too much power or if investors push aggressively for short-term returns.

“Addressing these governance gaps, while also strengthening supervision, is critical to ensuring the banking sector supports sustained economic growth rather than threatens it.”

The study adds to a growing discussion of how misconduct can accelerate systemic risks -especially if fines, reputational damage, and other penalties consume bank resources or divert attention from responsible lending.

The researchers make a number of recommendations, including tighter regulatory oversight and enhanced board accountability.

“Regulators could benefit from deploying extra scrutiny on institutions with even a single documented infraction, rather than solely focusing on banks with persistent or repeated misconduct,” said Prof Thornton.

“Ensuring boards have the independence, capacity, and diversity to challenge powerful executives can help deter strategies motivated by short-term gains but detrimental to long-term stability.

“And regular stress-testing exercises should also explicitly factor in the potential for misconduct-related events, capturing associated legal and reputational costs.”

They add that policymakers might explore incentives or structures that promote longer-term thinking among institutional investors, balancing out near-term profit goals with systemic safety.

‘Financial misconduct and bank risk-taking: evidence from US banks’, John Thornton, Yener Altunbaş and Yurtsev Uymaz is published in Journal of Banking & Finance on March 31.

END


ELSE PRESS RELEASES FROM THIS DATE:

Cardiac arrest during long-distance running races

2025-03-30
About The Study: This study found that despite increased participation in U.S. long distance running races, the incidence of cardiac arrest during U.S. marathons and half-marathons remains stable. There has been a marked decline in cardiac arrest mortality, and coronary artery disease was the most common etiology among cases with sufficient cause-related data. Effective emergency action planning with immediate access to defibrillation may explain the improvement in survival. Corresponding Authors: To ...

Preventable cardiac deaths during marathons are down, Emory study finds

Preventable cardiac deaths during marathons are down, Emory study finds
2025-03-30
While more people than ever are running marathons in the U.S., the risk of dying from a heart attack during a run has fallen dramatically in recent years. That’s a key conclusion from a new study by Jonathan Kim, associate professor in the Emory School of Medicine. Kim’s research is a follow-up to a study he published in 2012 – the first investigation into unexpected cardiac arrests during long distance running events. The new findings, published in JAMA, indicate that while the rate of marathon runners who suffer cardiac arrests remained unchanged, their chance for survival is twice what it was in the ...

New study finds peripheral artery disease often underdiagnosed and undertreated; opportunity to improve treatments, lower death rates

New study finds peripheral artery disease often underdiagnosed and undertreated; opportunity to improve treatments, lower death rates
2025-03-30
A new Intermountain Health study finds that peripheral artery disease, a condition that affects more than 10 million Americans over the age of 40, is often underdiagnosed and undertreated, with fewer women getting guideline-directed medical therapy than men. As a result, combined with this highly debilitating disease, patients with peripheral artery disease have a more than 50 percent chance of dying from the condition. Peripheral artery disease affects nearly 10 percent of the US population. It occurs when the arteries that carry blood to the legs and arms become narrowed or blocked by plaque ...

Use of antidepressant medication linked to substantial increase in risk of sudden cardiac death 

2025-03-30
Vienna, Austria- 30 March 2025  Sudden cardiac death (SCD) refers to an unexpected death of a person, believed to be caused by a heart-related issue. It occurs within one hour of the onset of symptoms in witnessed cases or within 24 hours of the person being last seen alive in unwitnessed cases.  The causes in people under the age of 39 are often a thickening of the heart muscle or an electrical problem with the heart. In older people, SCD is more likely to be caused by a narrowing of the blood vessels that supply the heart.   Previous research has shown1 that patients with psychiatric disorders have an increased all-cause mortality ...

Atrial fibrillation diagnosed in midlife is linked to a 21% increased risk of dementia at any age and a 36% higher risk of early-onset dementia 

2025-03-30
Vienna, Austria- 31 March 2025  New research presented at the EHRA 2025, a scientific congress of the European Society of Cardiology, shows that the presence of atrial fibrillation (AF) increases the risk of future dementia by 21% in patients diagnosed with AF under 70 and the risk of early-onset dementia (diagnosed before age 65 years) by 36%. The association was stronger in younger adults and was lost in older adults aged 70 years and over.  “This is the largest European population-based study evaluating the association between AF and dementia,” say the authors that include Dr Julián Rodriguez ...

Mode of death in patients with heart failure with mildly reduced or preserved ejection fraction

2025-03-30
About The Study: Among patients with heart failure with mildly reduced ejection fraction/heart failure with preserved ejection fraction in the Finerenone Trial to Investigate Efficacy and Safety Superior to Placebo in Patients With Heart Failure randomized clinical trial, higher proportions of cardiovascular and overall mortality in those with ejection fraction less than 50% were related principally to higher proportions of sudden death. A clear treatment effect of finerenone on cardiovascular or cause-specific mortality was not identified, although the trial was likely underpowered for these outcomes. Corresponding Author: To contact the corresponding author, Akshay S. Desai, ...

Intravenous ferric carboxymaltose in heart failure with iron deficiency

2025-03-30
About The Study: In patients with heart failure and iron deficiency, ferric carboxymaltose did not significantly reduce the time to first heart failure hospitalization or cardiovascular death in the overall cohort or in patients with a transferrin saturation less than 20%, or reduce the total number of heart failure hospitalizations vs placebo. Corresponding Author: To contact the corresponding author, Stefan D. Anker, MD, PhD, email s.anker@cachexia.de. To access the embargoed study: Visit our For The Media website at this link https://media.jamanetwork.com/ (doi:10.1001/jama.2025.3833) Editor’s ...

Artificial intelligence in the prevention of sudden death

2025-03-30
Many cases of sudden cardiac death could be avoided thanks to artificial intelligence. As part of a new study to be published in European Heart Journal, a network of artificial neurons imitating the human brain was developed by researchers from Inserm, Paris Cité University and the Paris public hospitals group (AP-HP), in collaboration with their colleagues in the USA. During the analysis of data from over 240 000 ambulatory electrocardiograms, this algorithm identified patients at risk of a serious arrhythmia that was capable of triggering cardiac arrest within the following 2 weeks in over 70% of cases. Each ...

Oral semaglutide vastly reduces heart attacks, strokes in people with type 2 diabetes

Oral semaglutide vastly reduces heart attacks, strokes in people with type 2 diabetes
2025-03-29
Both the injectable and oral forms of semaglutide, a glucagon-like peptide-1 receptor agonist, have gained recent attention for their effectiveness against weight gain, high blood sugar, and even alcohol cravings. A new clinical trial, co-led by endocrinologist and diabetes expert John Buse, MD, PhD, and interventional cardiologist Matthew Cavender, MD, MPH, at the UNC School of Medicine has shown that the oral form of semaglutide can significantly reduce cardiovascular events in people with type 2 diabetes, atherosclerotic cardiovascular disease, and/or ...

Prothrombin complex concentrate vs frozen plasma for coagulopathic bleeding in cardiac surgery

2025-03-29
About The Study: In this unblinded randomized clinical trial, prothrombin complex concentrate had superior hemostatic efficacy and safety advantages to frozen plasma among patients requiring coagulation factor replacement for bleeding during cardiac surgery. Corresponding Author: To contact the corresponding author, Keyvan Karkouti, MD, email keyvan.karkouti@uhn.ca. To access the embargoed study: Visit our For The Media website at this link https://media.jamanetwork.com/ (doi:10.1001/jama.2025.3501) Editor’s Note: Please see the article for additional information, including other authors, author contributions and affiliations, ...

LAST 30 PRESS RELEASES:

Making moves and hitting the breaks: Owl journeys surprise researchers in western Montana

PKU Scientists simulate the origin and evolution of the North Atlantic Oscillation

ICRAFT breakthrough: Unlocking A20’s dual role in cancer immunotherapy

How VR technology is changing the game for Alzheimer’s disease

A borrowed bacterial gene allowed some marine diatoms to live on a seaweed diet

Balance between two competing nerve proteins deters symptoms of autism in mice

Use of antifungals in agriculture may increase resistance in an infectious yeast

Awareness grows of cancer risk from alcohol consumption, survey finds

The experts that can outsmart optical illusions

Pregnancy may reduce long COVID risk

Scientists uncover novel immune mechanism in wheat tandem kinase

Three University of Virginia Engineering faculty elected as AAAS Fellows

Unintentional drug overdoses take a toll across the U.S. unequally, study finds

A step toward plant-based gelatin

ECMWF unveils groundbreaking ML tool for enhanced fire prediction

The food and fuel that farms itself

Patient- and Community-Level Characteristics Associated With RSV Vaccination

Intersectional Racial and Sex Disparities in Unintentional Overdose Mortality

PLOS announces new partnership in China

New options for controlling type 2 diabetes

Senolytics target Alzheimer’s-linked brain enzymes without harming healthy ones

An immune cell may explain how maternal inflammation causes neurodevelopmental disorder

New study refocuses research on mysterious falcon decline

Omega-6 fatty acid promotes the growth of an aggressive type of breast cancer

FAU secures $1.3 million NIH grant for breakthrough in HIV self-test technology

Study finds higher cardiac deaths in combined day-night heatwaves

NYC, Baltimore research scientists receive grants to study cardiovascular/diabetes connection

AI propaganda: prolific and persuasive

An efficient self-assembly process for advanced self-healing materials

Study reveals stark racial disparities in IBD care across the united states

[Press-News.org] Stricter oversight needed as financial misconduct drives risk-taking in banking