Institutional market imbalance and licensing in securities markets

Published date28 December 2012
DOIhttps://doi.org/10.1108/13590791311287346
Pages39-51
Date28 December 2012
AuthorOskar Engdahl
Subject MatterAccounting & finance
Institutional market imbalance
and licensing in securities
markets
Oskar Engdahl
Department of Sociology and Work Science, University of Gothenburg,
Gothenburg, Sweden
Abstract
Purpose – The paper discusses how proficiency-based licensing of professionals may promote a
culture of fair play and thus counteract economic and white collar crime in markets characterised by
unilateral focus on financial targets and a culture of competition.
Design/methodology/approach – The crime prevention potential of licensing schemes is analysed
using disciplinary sanction decisions, documentation of how the licensing scheme for professionals
working in the Swedish securities market is organised, interviews with representatives of the scheme
and previous research.
Findings – Licensing schemes have good potential to strengthen a culture of fair play and thereby
prevent criminality and mismanagement. Particular emphasis should be put on the opportunity to use
such schemes to raise regulatory awareness in the industry and thereby suppress the growth of
criminogenic sub-cultures in firms. When combined with the potential of this self-regulatory approach
to give licence holders a sense that obligations and sanctions arising from the licensing scheme
emanate from the industry itself, the crime-preventing effect may be substantial.
Originality/value – Even though licensing of professionals has become an increasingly common
phenomenon in securities markets worldwide, licensing schemes have yet to be documented, analysed,
or studied. Nor are there any research overviews devoted to the mechanisms which more precisely
explain how unilateral focus on financial targets is a causal factor in economic and white collar crime.
Understanding of the organisation and potential effects of licensing schemes would be very useful
when initiating and further developing action programmes.
Keywords Sweden,Securities markets, Licensing,Economic and white-collarcrime, Financial markets,
Crime prevention,Institutional market imbalance,Culture of competition
Paper type Research paper
Introduction
In studies of economic and white collar crime, a social structure in which there is
unilateral focus on financial targets has always been advanced as a key explanatory
factor of criminality. From such a perspective, crime, ethics violations and other
mismanagement are regarded as the result of production targets, market shares and
profit margins having become so critical to status relations that it has become
permissible to achieve these ends by any means necessary. A “culture of competition”
has emerged in which “it’s winning that matters, not how you play the game”. Laws and
ethical guidelines for how goals should be attained have become unimportant;
administrative control sys tems meant to monitor regulatory co mpliance have
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1359-0790.htm
This article was written as part of the research project “Crime Prevention in the Financial
Market”, funded by the Swedish Research Council (grant no. 2007-2179).
Institutional
market
imbalance
39
Journal of Financial Crime
Vol. 20 No. 1, 2013
pp. 39-51
qEmerald Group Publishing Limited
1359-0790
DOI 10.1108/13590791311287346

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