This lesson examines the ethical principles that should guide banking conduct, the role of professional standards, and the application of ethical decision-making models.
7.1 The Importance of Ethics in Banking
Ethics in banking ensures fair practices, transparency, and accountability, promoting trust, corporate governance, and responsible banking for sustainable growth . The Kogan Page book Culture, Conduct and Ethics in Banking, endorsed by the Chartered Banker Institute, emphasises the importance of professionalism for banks and explores how all staff play a key role in putting customers at the heart of their business . As the Keele University module notes, ethics and trust are at the core of the financial services sector .
7.2 Ethical Theories and Decision-Making Models
The University of Chester module requires the comparison of “a range of ethical theories and ethical decision-taking models with their application in a decision-making context in the banking environment” . Key ethical theories include:
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Consequentialist (Utilitarianism):Â The ethical choice produces the greatest good for the greatest number.
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Deontological (Duty-based ethics):Â Ethics are based on rules and duties, regardless of consequences.
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Virtue Ethics (Aristotelian): Focuses on the character of the individual and what a virtuous person would do .
Ethical decision-making models help professionals identify ethical issues, evaluate alternative actions, make decisions, and reflect on outcomes .
7.3 Professional Standards and Conduct
Professionalism in banking is a commitment to a code of conduct, continuing professional development, and acting in the public interest . The ABA Law and Banking course covers “corporate responsibility” and the “legal obligations of banks to act responsibly as businesses and in their dealings with customers” . The University of Cumberlands course explores “the ethical issues in the financial services industry and the legal and regulatory frameworks that govern the financial system,” with attention to the knowledge areas covered in the Certified Regulatory Compliance Manager (CRCM) exam .