Ethics in banking and finance

A changing perception of what constitutes ‘good’ corporate performance

The role of business beyond generating profits for, and paying dividends to, the providers of its capital is under increasing scrutiny. How those profits and dividends are generated, and the extent to which other stakeholders such as customers, work colleagues and the communities in which the business operates also benefit, or are at least not prejudiced, are regarded increasingly as important metrics of performance. For banking and finance, this broader scrutiny is particularly acute as one of the lessons learnt from the financial crisis has been that businesses will be judged not only in terms of the products and services they offer, but also the way in which they are provided. 

Within banking and finance, as much regulatory attention is now paid to expectations around financial conduct as to prudential regulation – as reflected in the post-crisis creation in the UK of the Financial Conduct Authority (FCA) in addition to the Prudential Regulatory Authority (PRA). While both are concerned with the safety and soundness of the financial system, they have quite distinct perspectives as reflected in their statutory obligations. This is in addition to more general company law and corporate governance, not to mention market-based guidance and codes of practice.

In approaching this guide, we have set out neither to produce a compendium, nor to duplicate, let alone interpret, the work of others. No one would thank us if we had. Instead, we have set our sights on profiling issues relevant when considering organisational ethics based around systems and controls, employees, customers and other stakeholders. Prepared more as an online resource, the notes that follow are intended to profile issues that can be said to be of ethical relevance, in the process bringing together key sources and reference documents.

Ethics in banking and finance blog - by Paul Chisnall, Director, Finance & Operations Policy

Ethics in business – the importance of ensuring firms act ethically in the way they conduct business to the benefit of customers and staff – has become an increasingly key topic, not least within the banking and finance industry.

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