Ponzis : The Science and Mystique of a Class of Financial Frauds
Ponzis are among the most ubiquitous and least understood phenomena of economic life. They acquired a certain salience with the global financial crisis of 2008 and the crash of Bernie Madoff s celebrated Ponzi scheme. This paper explains the struct...
| Main Author: | |
|---|---|
| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank Group, Washington, DC
2014
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2014/07/19795533/ponzis-science-mystique-class-financial-frauds http://hdl.handle.net/10986/19358 |
| id |
okr-10986-19358 |
|---|---|
| recordtype |
oai_dc |
| spelling |
okr-10986-193582021-04-23T14:03:51Z Ponzis : The Science and Mystique of a Class of Financial Frauds Basu, Kaushik BANKRUPTCY BIDS BORROWER BORROWING CAPITAL GAINS CENTRAL BANKS COLLATERAL CONSUMERS CORPORATE DEFAULT CORPORATE SOCIAL RESPONSIBILITY CURRENCY DEBT DEBT CRISIS DEFLATION DEPOSITORS DEPOSITS DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DIVIDEND ECONOMIC LIFE ECONOMIC THEORY EMPLOYEE ENTREPRENEUR EXCHANGE BOARD EXCHANGE COMMISSION FAMILIES FINANCIAL COMPANIES FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL FRAUD FINANCIAL FRAUDS FINANCIAL MARKETS FINANCIAL PRODUCT FINANCIAL PRODUCTS FIXED SHARE FRAUD FRAUDS GOLD PRICES GOVERNMENT POLICY HOLDING HOME MORTGAGE INCOME INCOMES INTERNATIONAL BANK INVESTING IRRATIONAL EXUBERANCE LENDER LIQUIDITY LOAN LOTTERIES MARKET FORCES MARKETING PRICE FLUCTUATIONS RECESSION REPUTATION RETURN RETURNS SALES SECURITIES SOCIAL RESPONSIBILITY SPECULATIVE BUBBLE SPREAD STARTUP STOCK OPTION STOCK OPTIONS TAX TRANSACTIONS COST TRANSACTIONS COSTS UNEMPLOYMENT WAGES WEALTH Ponzis are among the most ubiquitous and least understood phenomena of economic life. They acquired a certain salience with the global financial crisis of 2008 and the crash of Bernie Madoff s celebrated Ponzi scheme. This paper explains the structure of Ponzi schemes and goes on to argue that what makes this such a troubling phenomenon is its ability to be camouflaged amidst legitimate practices. It is shown, for instance, that the common practice of giving stock options to employees could be a potential Ponzi that allows corporations to flourish for a while by borrowing from its own future. The paper goes on to discuss the need for intelligent regulation to incise harmful Ponzis (not all Ponzis are harmful) while taking care not to damage other legitimate activities that surround them. 2014-08-15T15:23:13Z 2014-08-15T15:23:13Z 2014-07 http://documents.worldbank.org/curated/en/2014/07/19795533/ponzis-science-mystique-class-financial-frauds http://hdl.handle.net/10986/19358 English en_US Policy Research Working Paper;No. 6967 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Group, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
BANKRUPTCY BIDS BORROWER BORROWING CAPITAL GAINS CENTRAL BANKS COLLATERAL CONSUMERS CORPORATE DEFAULT CORPORATE SOCIAL RESPONSIBILITY CURRENCY DEBT DEBT CRISIS DEFLATION DEPOSITORS DEPOSITS DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DIVIDEND ECONOMIC LIFE ECONOMIC THEORY EMPLOYEE ENTREPRENEUR EXCHANGE BOARD EXCHANGE COMMISSION FAMILIES FINANCIAL COMPANIES FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL FRAUD FINANCIAL FRAUDS FINANCIAL MARKETS FINANCIAL PRODUCT FINANCIAL PRODUCTS FIXED SHARE FRAUD FRAUDS GOLD PRICES GOVERNMENT POLICY HOLDING HOME MORTGAGE INCOME INCOMES INTERNATIONAL BANK INVESTING IRRATIONAL EXUBERANCE LENDER LIQUIDITY LOAN LOTTERIES MARKET FORCES MARKETING PRICE FLUCTUATIONS RECESSION REPUTATION RETURN RETURNS SALES SECURITIES SOCIAL RESPONSIBILITY SPECULATIVE BUBBLE SPREAD STARTUP STOCK OPTION STOCK OPTIONS TAX TRANSACTIONS COST TRANSACTIONS COSTS UNEMPLOYMENT WAGES WEALTH |
| spellingShingle |
BANKRUPTCY BIDS BORROWER BORROWING CAPITAL GAINS CENTRAL BANKS COLLATERAL CONSUMERS CORPORATE DEFAULT CORPORATE SOCIAL RESPONSIBILITY CURRENCY DEBT DEBT CRISIS DEFLATION DEPOSITORS DEPOSITS DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DIVIDEND ECONOMIC LIFE ECONOMIC THEORY EMPLOYEE ENTREPRENEUR EXCHANGE BOARD EXCHANGE COMMISSION FAMILIES FINANCIAL COMPANIES FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL FRAUD FINANCIAL FRAUDS FINANCIAL MARKETS FINANCIAL PRODUCT FINANCIAL PRODUCTS FIXED SHARE FRAUD FRAUDS GOLD PRICES GOVERNMENT POLICY HOLDING HOME MORTGAGE INCOME INCOMES INTERNATIONAL BANK INVESTING IRRATIONAL EXUBERANCE LENDER LIQUIDITY LOAN LOTTERIES MARKET FORCES MARKETING PRICE FLUCTUATIONS RECESSION REPUTATION RETURN RETURNS SALES SECURITIES SOCIAL RESPONSIBILITY SPECULATIVE BUBBLE SPREAD STARTUP STOCK OPTION STOCK OPTIONS TAX TRANSACTIONS COST TRANSACTIONS COSTS UNEMPLOYMENT WAGES WEALTH Basu, Kaushik Ponzis : The Science and Mystique of a Class of Financial Frauds |
| relation |
Policy Research Working Paper;No. 6967 |
| description |
Ponzis are among the most ubiquitous and
least understood phenomena of economic life. They acquired a
certain salience with the global financial crisis of 2008
and the crash of Bernie Madoff s celebrated Ponzi scheme.
This paper explains the structure of Ponzi schemes and goes
on to argue that what makes this such a troubling phenomenon
is its ability to be camouflaged amidst legitimate
practices. It is shown, for instance, that the common
practice of giving stock options to employees could be a
potential Ponzi that allows corporations to flourish for a
while by borrowing from its own future. The paper goes on to
discuss the need for intelligent regulation to incise
harmful Ponzis (not all Ponzis are harmful) while taking
care not to damage other legitimate activities that surround them. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Basu, Kaushik |
| author_facet |
Basu, Kaushik |
| author_sort |
Basu, Kaushik |
| title |
Ponzis : The Science and Mystique of a Class of Financial Frauds |
| title_short |
Ponzis : The Science and Mystique of a Class of Financial Frauds |
| title_full |
Ponzis : The Science and Mystique of a Class of Financial Frauds |
| title_fullStr |
Ponzis : The Science and Mystique of a Class of Financial Frauds |
| title_full_unstemmed |
Ponzis : The Science and Mystique of a Class of Financial Frauds |
| title_sort |
ponzis : the science and mystique of a class of financial frauds |
| publisher |
World Bank Group, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2014/07/19795533/ponzis-science-mystique-class-financial-frauds http://hdl.handle.net/10986/19358 |
| _version_ |
1764443704761778176 |