Welcome to the Nexus of Ethics, Psychology, Morality, Philosophy and Health Care

Welcome to the nexus of ethics, psychology, morality, technology, health care, and philosophy
Showing posts with label Bankers. Show all posts
Showing posts with label Bankers. Show all posts

Thursday, September 8, 2016

Deutsche Bank's $10-Billion Scandal

By Ed Caesar
The New Yorker
Originally published August 29, 2016

Here is an excerpt:

Scandals have proliferated at Deutsche Bank. Since 2008, it has paid more than nine billion dollars in fines and settlements for such improprieties as conspiring to manipulate the price of gold and silver, defrauding mortgage companies, and violating U.S. sanctions by trading in Iran, Syria, Libya, Myanmar, and Sudan. Last year, Deutsche Bank was ordered to pay regulators in the U.S. and the U.K. two and a half billion dollars, and to dismiss seven employees, for its role in manipulating the London Interbank Offered Rate, or libor, which is the interest rate banks charge one another. The Financial Conduct Authority, in Britain, chastised Deutsche Bank not only for its manipulation of libor but also for its subsequent lack of candor. “Deutsche Bank’s failings were compounded by them repeatedly misleading us,” Georgina Philippou, of the F.C.A., declared. “The bank took far too long to produce vital documents and it moved far too slowly to fix relevant systems.”

The article is here.

Wednesday, December 10, 2014

Business culture and dishonesty in the banking industry

By Alain Cohn, Ernst Fehr & Michel AndrĂ© MarĂ©chal
Nature (2014) doi:10.1038/nature13977
Published online 19 November 2014

Abstract

Trust in others’ honesty is a key component of the long-term performance of firms, industries, and even whole countries. However, in recent years, numerous scandals involving fraud have undermined confidence in the financial industry. Contemporary commentators have attributed these scandals to the financial sector’s business culture, but no scientific evidence supports this claim. Here we show that employees of a large, international bank behave, on average, honestly in a control condition. However, when their professional identity as bank employees is rendered salient, a significant proportion of them become dishonest. This effect is specific to bank employees because control experiments with employees from other industries and with students show that they do not become more dishonest when their professional identity or bank-related items are rendered salient. Our results thus suggest that the prevailing business culture in the banking industry weakens and undermines the honesty norm, implying that measures to re-establish an honest culture are very important.

The article can be found here.