Public sector corruption: Lessons from Daiwa, Sumitomo, and Bank of Estonia

Daiwa, Sumitomo, and Bank of Estonia experiences display patterns from which lessons emerge for public sector financial managers. Effective fiscal policies, avoidance of conflicts on interest, and attention to the hazards of joint regulation by home- and foreign-owned entities' regulators are essential to avoid scandals and allegations of public sector corruption. Through international initiatives to align capital requirements, alongside budgetary commitments to regulation, examinations, and monitoring activities, financial managers can develop a more effective infrastructure for global financial markets. This paper details the scandals, documents their social cost, identifies patterns, discusses implications for public policy and budgeting, and proposes action.