Can Regulatory Incentives for High-Risk Lending Lead to White-Collar Crime?
Luis UrrutiaThis article discusses how the current regulatory structure of the Mexican banking industry may facilitate the commission of white-collar crime. Initially, it provides an overview of the industry’s structural and institutional conditions and the impact of policies on opportunities for high-risk activities. Some of the industry’s current problemssuch as an all-encompassing liability protection mechanism, widespread tolerance of weak prudential practices, and deficient accounting and reporting standardsmaintain an environment propitious for reckless activities in Mexican banking management. The possibility of connections between highly risky banking transactions and unlawful activities is then explored. Finally, the author argues that future policymaking processes, when considering changes in regulatory structure in the banking industry, must take into account the incentives produced by policies implemented in earlier years.Published: Chicago Policy Review (Volume 2, No.
