Peak financial scandal? History says not


As 2019 gets under way, some officials at Goldman Sachs won’t be relishing what the new year might bring. The Malaysian government has claimed that billions of dollars vanished from its 1Malaysia Development Berhad (1MDB) sovereign wealth fund after Goldman arranged financing for the group. 

随着2019年的到来,高盛(Goldman Sachs)的一些高层人物将不会欣赏新的一年可能出现的事态进展。马来西亚政府声称,在高盛为“一个马来西亚发展有限公司”(1MDB,简称:一马公司)安排融资后,这家主权财富基金有数十亿美元不知去向。

Last month, the country’s finance minister said it would seek an eye-popping $7.5bn in reparations from Goldman over the affair – a demand that would potentially make this one of the bigger financial scandals of recent years. Needless to say, Goldman officials vehemently deny any wrongdoing (and thus the need to pay), blaming local Malaysian officials instead. But, as the battle gathers pace, it is worth considering a bigger question: is the number of financial scandals increasing? 


If you were to ask ordinary investors, many might say “yes”. Even before the 1MDB story broke, the past decade has delivered a litany of scandals, ranging from last year’s revelations of accounting irregularities at British companies such as Carillion and Patisserie Valerie to Toshiba in Japan in 2015. And let’s not forget the uncovering of the Bernie Madoff investment swindle, Libor manipulation and subprime mortgage scandals before that.

如果你问普通投资者,很多人可能会说“是的”。甚至在1MDB事件爆发之前,过去10年也发生了一连串的丑闻,比如去年Carillion和Patisserie Valerie等英国公司以及2015年日本东芝(Toshiba)的会计违规行为的曝光。我们也不要忘了此前曝光的伯尼•马多夫(Bernie Madoff)投资诈骗案、Libor操纵案和次级抵押贷款丑闻。

But Steve Toms, a professor of accounting at Leeds University, suggests that this perception of frequency isn’t entirely correct. Toms has studied the history of financial scandals in a systematic way, cataloguing examples from 1800 to 2009. His research, presented to the Institute of Chartered Accountants in England and Wales last month, confirms that the frequency of reported financial frauds in the US and UK has indeed escalated since the late 1970s, but that this rise came after a long period of decline. If you want to find the most consistently scandal-plagued period in history, Toms argues, the 19th century beats present-day dramas hands down.

但是,利兹大学(Leeds University)会计学教授史蒂夫•汤姆斯(Steve Toms)表示,这种对丑闻爆发频度的看法并不完全正确。汤姆斯系统地研究了金融丑闻的历史,对1800年至2009年的案例进行了梳理。他上月向英格兰和威尔士特许会计师协会(Institute of Chartered Accountants)提交研究报告,证实了美国和英国报道金融欺诈的频度自20世纪70年代后期以来确实大幅上升,但这种上升是在长期下降之后出现的。汤姆斯认为,如果你想找到历史上最持续的丑闻频发时期,那么19世纪会完胜当下。

Toms partly reached his conclusion by looking at the frequency with which words such as “fraud”, “corruption” or “scandal” appeared in the local press. That approach has obvious limitations. For one thing, language has changed over  time: “swindler” was a common term in the 18th century but is not much used now. Still, the patterns Toms finds are thought-provoking. During the 18th century, the volume of reported scandals fluctuated wildly, surging during the South Sea Bubble drama of 1720. The growth of the joint-stock company concept helped to dampen the trend – but only a touch. 

汤姆斯在一定程度上是通过查看当地报刊上出现“欺诈”、“腐败”或“丑闻”等词语的频度来得出他的结论。这种方法有明显的局限性。首先,语言随着时间的推移而发生变化:“骗子”(swindler)在18世纪是一个常用语,但现在用得不多。尽管如此,汤姆斯发现的规律发人深省。18世纪期间,报道的丑闻数量大幅波动,在1720年的南海泡沫(South Sea Bubble)事件期间飙升。股份公司概念的兴起帮助抑制了这一趋势——但只是在轻微程度上。

In the middle of the 19th century, a glut of middle-class saving prompted investors to dash into hot new areas such as railways bonds – and shareholders became more diverse and less well-informed. The scandal index went up again, with crises engulfing railway investment schemes and banks, episodes that were immortalised in the works of Victorian writers such as Anthony Trollope and Charles  Dickens.

19世纪中叶,中产阶级有了大量的储蓄,这促使投资者涌入铁路债券等热门的新领域,而股东变得更加多元化,知情程度有所下降。丑闻指数再次上升,危机席卷了铁路投资计划和银行,这些事件因被安东尼•特罗洛普(Anthony Trollope)和查尔斯•狄更斯(Charles Dickens)等维多利亚时代的作家写入作品而不朽。

This eventually sparked a backlash: the accounting profession sprang to life and was charged with conducting regular audits. And, for eight decades, the scandal index steadily declined in the UK, until it plateaued at a low level between the 1940s and 1970s. (A similar pattern occurred in the US, with a spike around the 1929 crash.) Yet, from the 1970s on, “scandals” started to rise again, although to levels below those of the 19th century. Why? Toms suggests the swing may reflect the financial deregulation of the 1980s, when the UK began to loosen the shackles on finance with initiatives such as the “Big Bang” reforms in the City of London.

这最终引发了反弹:会计行业应运而生,并负责定期审计。在整整80年期间,英国的丑闻指数稳步下降,最终在20世纪40年代至70年代达到低位(美国的规律类似,只是在1929年股市崩盘期间短暂飙升)。然而,从20世纪70年代开始,“丑闻”开始再次上升,尽管最终水平仍低于19世纪。为什么?汤姆斯提出,这一转折可能反映了20世纪80年代的金融管制放松,当时英国开始通过伦敦金融城“金融大改革”(Big Bang)等举措放松对金融业的束缚。

The swelling size of the finance sector may have played a role too. A few years ago, Thomas Philippon, a New York-based economist, did his own number crunching to see how profits and pay in finance have fluctuated during the past 130 years. The results from the research (conducted entirely separately from Toms’s work) produced a chart that looks similar to the scandal index; from the 1970s, the size of finance and financiers’ pay packets rocketed up. 

金融业规模膨胀也可能发挥了作用。几年前,纽约经济学家托马斯•菲利蓬(Thomas Philippon)做了自己的数字运算,以了解过去130年金融业利润和薪酬的波动规律。他的研究(与汤姆斯的工作完全分开进行)产生了一个看上去与丑闻指数相似的图表;从20世纪70年代开始,金融规模和金融家薪酬双双飙升。

Toms points to another crucial factor: the growing complexity of big global companies. As money hops across borders in an opaque manner, it is becoming increasingly hard to track. 


Is there a solution to stop such scandals? Not an easy one. Some accountants and law-enforcement officials hope that the rise of digital technology will produce new scandal-fighting tools. After all, cyber records can potentially offer whole new levels of transparency, machine-learning tools can hunt for irregularities faster than a human and blockchain technologies make financial transfers more secure. Indeed, if you want to be really optimistic, it is possible to hope that just as the 19th-century scandals sparked a backlash – launching the audit industry – the 21st-century scandals might trigger a new structural wave of reform. 


Sadly, we are not in this scandal-free world yet. This could be another busy year for the forensic accountants; never mind what does (or does not) bubble on at Goldman Sachs.