The ethics of money : the place of values in contemporary banking
thesisposted on 2023-05-27, 12:31 authored by Villa, JS
Banks have a central role and importance in all commerce and hence in all societies. This thesis investigates the ethical basis of banking practice with the aim of developing an account of the virtues appropriate to bankers and banking. One central issue concerns a conflict between the interests of banks and their customers, and how this conflict plays out in relation to the lending policies and fee structure of banks. Such lending policies can have a significant effect on banks, their customers and a range of stakeholders. This research project investigated empirical evidence through qualitative interviews with senior bankers in two locations, Australia and Hong Kong, to elicit their thoughts on banking areas that involve customer interaction, namely, deposit-taking, credit cards, home mortgage loans, corporate finance, and foreign exchange. The institutions selected hold a substantial segment of banking business in their respective countries and are thus representative of bankers' perspectives. The dissertation also entailed a case study of the causes and consequences of the American sub-prime crisis that was precipitated by the financial sector. The interviews revealed an assertion of good ethical conduct based on adherence to peerdetermined codes of conduct and compliance with regulations. There was also a common predisposition to claims of corporate social responsibility and reputation preservation but these have tended to mask the powerful underlying sales thrust. A key finding of the study points to a lapse in ethical values in banks due to excessive reliance on self-interest. Although self-interest is not in itself wrong, there has been a lack of moderation vis-‚àö‚Ä†-vis the interests of less powerful customers. A related finding is a prevailing resistance to regulation that is necessary to curtail selfish and irresponsible behaviour by banks. The interview subjects prefer industry selfregulation to government supervision. However, the banks in Australia and Hong Kong, which have been subjected to tighter regulation, have survived the global financial crisis better than their American counterparts despite complaints about the severity of their regulatory climate. There is a strong case to ascribe ethical failure to American practices that triggered the sub-prime calamities, which have devastated homeowners and the global economy. American banks and regulators both operated on the erroneous supposition that the quest after extreme profits would be restrained by free market forces. The conclusions allude to virtues that are necessary for banks to espouse moral conduct. These virtues can be embedded through leadership and cultural change.
Rights statementCopyright 2010 author - The University is continuing to endeavour to trace the copyright owner(s) and in the meantime this item has been reproduced here in good faith. We would be pleased to hear from the copyright owner(s) CD-ROM contains interview transcripts. Thesis (PhD)--University of Tasmania, 2010. Includes bibliographical references. Part A. Approaching banking from a philosophical perspective. Ch. 1. Global credit crisis -- Ch. 2. Views of banking ethics -- Part B. The idea of ethics in banking: self conceptions and critique. Ch. 3. Ethical understanding in the banking sector -- Ch. 4. Self-governance and state regulation -- Ch. 5. Preliminary conclusions -- Part C. Harsh realities and critique of banking ethics. Ch. 6. The sub-prime crisis: an ethical failure? -- Ch. 7. Impact of securitisation -- Ch. 8. Conclusions