Banking ethics

Since the 1980s, the global financial system has faced several crises that have led regulators to consider new conjectural and structural problems. These crises (new technology bubbles, the sub‐prime crisis …) have led economists and financial analysts to the following conclusions. First of all, systemic risk has increased during the last 30 years, which had led regulators to devise rules to evaluate information more efficiently. Second, the recent collapse of stock markets despite the national rescue measures shows the importance of preventative procedures. The third point is that aggressive capitalism has demonstrated its limits. The aim of this paper is to show that regulation is a necessary but not sufficient condition to ensure the efficiency of banking institutions, financial markets and the management of companies.

Through the analysis of the Swiss banking sector, the paper provides an insight for banks to satisfy social pressure on more ethical behavior. This case could be an example for another functioning for financial institutions.

By refocusing on their core business, banking institutions will be capable of realizing profit and creating value for the community.

The arguments discussed in this paper could be of interest both for professionals and academics willing to solve the antagonism between profit and ethics: profit can be compatible with social value added.

Banking and finance is not “an ethics free zone”. By changing their behavior, banks can improve their credibility on the market and renew the confidence towards clients.