Case Study of the Moldovan Bank Fraud: Is Early Intervention the Best Central Bank Strategy to Avoid Financial Crises?

Alexandru Monahov and Thomas Jobert ()

No 2017-07, GREDEG Working Papers from Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France

Abstract: In this paper, we study the means by which a billion dollar fraud that was perpetuated in the Moldovan banking sector evolved into a severe financial crisis in which the Central Bank’s inaction came under scrutiny. We examine the financial operations through which money was taken out of the banking system and reconstruct the fraudulent schemes that led to the demise of three systemically important banks. We also create an agent-based simulation of the banking system which replicates the pre-crisis environment and the fraudulent schemes to determine whether Central Bank intervention could have improved the outcome of the crisis.

Keywords: Financial Fraud; Prudential supervision; Central Bank Intervention; Agent Based Model; Multi-Agent Simulation (search for similar items in EconPapers)
JEL-codes: C61 C63 E58 E65 G28 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2017-03
New Economics Papers: this item is included in nep-cba, nep-cmp, nep-mac, nep-mon and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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