This study responds to recent calls in the literature to examine fraud using detailed case studies, extending knowledge beyond individual incentives and capital market reactions towards a more contextualized understanding of the concept. We use an institutional logics perspective to challenge existing assumptions about a universally valid meaning of compliance, fraud, and faithful representation. Presenting the case of the Swedish bank HQ, we show how the interpretation of the accounting standard for option measurement varies across different enforcement bodies because the meaning of compliance is socially negotiated across the institutional logics of markets, financial regulation, and law. The independent decision-making of the different enforcement bodies leads to a systematic variation in the interpretation of principles-based accounting standards without ultimate coordination. To define consistent boundaries of compliance across institutional logics, and thus, to distinguish between fraud and allowable managerial discretion becomes problematic. Faithful representation, in turn, cannot be understood as financial statements reflecting a correct value or as financial statements being prepared in accordance with acceptable practice, as suggested in the earlier literature. Instead, faithful representation itself becomes a contextually bound concept, which can only be defined within an institutional logic.

This chapter studies the post-crisis regulation of remuneration policies in investment firms. The main focus is on variable remuneration, because such compensation schemes highlight the conflict between owners' governance, on one hand, and financial stability and investor protection on the other. The regulation of remuneration in investment firms is one of many attempts to regulate with the purpose of improving corporate governance. The chapter then discusses how MiFID II and related regulation impacts on corporate governance of investment firms, with remuneration policies as examples and the focus of discussion. It links two different levels of accountability already established in literature: the firm level of accountability and the regulatory level of accountability. The reforms of the regulation of investment firms also give reasons to assess whether the EU regulatory policy for the financial markets is changing.

EU banking regulation has grown from a fundamental set of rules targeting the vast majority of banks, to a large amount of detailed rules with a focus to regulate the few very large banks in the Union. The EU passport for conducting banking business and other financial services was one of the first regulatory steps in this field. Today the rules are highly harmonized and also supervision is in focus not least since the Banking Union was set up.