Jump to ContentJump to Main Navigation
TradersRisks, Decisions, and Management in Financial Markets$
Users without a subscription are not able to see the full content.

Mark Fenton-O'Creevy, Nigel Nicholson, Emma Soane, and Paul Willman

Print publication date: 2004

Print ISBN-13: 9780199269488

Published to Oxford Scholarship Online: October 2011

DOI: 10.1093/acprof:oso/9780199269488.001.0001

Show Summary Details
Page of

PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 16 January 2021

Managing Traders

Managing Traders

(p.178) Chapter 8 Managing Traders

Mark Fenton-O'Creevy

Nigel Nicholson

Emma Soane

Paul Willman

Oxford University Press

In analysing the behaviour of traders in financial markets, one would observe that the reliance of traders on high bonus payments slows down the accumulation of profits in the investment-banking sector and may expose how firms employ traders at high levels of operational risk. The other aspect concerns how publicity surrounding the concealment of losses has resulted in regulatory intervention and public concern about malfeasance. However, we know that traders are not supposed to take risks that extreme. This paradox is investigated by looking at how traders are managed. There is a regulatory concern with management's attitude towards risk and controls as a part of a broader risk-based approach in assessing firms' behaviour. The chapter will look into relevant theory, present data, and assess the implications of these data in order to address the main concern regarding the effect of loss aversion rather than profit accumulation.

Keywords:   operational risk, profit accumulation, loss aversion, regulatory intervention, bonuses

Oxford Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs , and if you can't find the answer there, please contact us .