Ethics in Banking

1. Front Matter

   Pages i-xi

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2. Approaching Banking from a Philosophical Perspective

   1. Front Matter

      Pages 1-1

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   2. Global Credit Crisis

      • Jes Villa

      Pages 3-7

   3. Views of Banking Ethics

      • Jes Villa

      Pages 8-32

3. The Idea of Ethics in Banking: Self-Conceptions and Critique

   1. Front Matter

      Pages 33-33

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   2. Ethical Understanding in the Banking Sector

      • Jes Villa

      Pages 35-91

   3. Self-Governance and State Regulation

      • Jes Villa

      Pages 92-115

   4. Preliminary Conclusions

      • Jes Villa

      Pages 116-124

4. Harsh Realities and Critique of Banking Ethics

   1. Front Matter

      Pages 125-125

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   2. The Sub-Prime Crisis: An Ethical Failure?

      • Jes Villa

      Pages 127-138

   3. Impact of Securitization

      • Jes Villa

      Pages 139-151

   4. Conclusions

      • Jes Villa

      Pages 152-171

5. Back Matter

   Pages 173-212

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The solution to the uninhibited lending that was commonplace before the financial crisis has been to introduce tighter regulation to ensure robustness within banks. However, this solution has overlooked the underlying problem of ethical failure in the industry. In the wake of numerous bank collapses, many survivors continue in unprincipled conduct because ethical virtues have not been instilled. This book investigates the ethical basis of banking practice. It explores the conflict between the interests of banks and their customers, and how this conflict plays out in relation to the lending policies and fee structures of banks. Where such lending policies have a significant effect on banks, their customers and a range of stakeholders, the author investigates the views of leading bankers on their lending practices. The author then goes on to debate the events of the global financial crisis from a moral perspective, and argues that ethical failure triggered the American sub-prime calamities which have devastated homeowners and the global economy. The book argues that American banks and regulators both operated on the erroneous supposition that the quest after extreme profits would be restrained by free market forces. Where banks have a central role and importance in all commerce and hence in all societies, the author concludes by revealing a set of virtues that are necessary for banks to espouse moral conduct. He suggests that these virtues can be embedded through leadershipand cultural change, with the aim of developing an account of the virtues appropriate to bankers and banking.

• sub-prime crisis
• global financial crisis
• ethics
• trust
• banks
• housing
• mortgage
• loans
• bank
• banking
• banking crisis
• business ethics
• corporate finance
• deregulation
• integrity
• management
• risk management
• investments and securities

Jes Villa has held various professional positions in investment banking in New York, Chicago, Asia, and Australia, and rose to hold Chief Executive and Managing Director positions in various firms specialising in corporate finance and private equity. He received an MBA from Wharton School, University of Pennsylvania, USA. He obtained a PhD in Philosophy and Ethics from University of Tasmania, Australia / Ludwig-Maximilians-Universität, University of Munich, Germany. He now lectures at Weihenstephan-Triesdorf University of Applied Sciences in Munich, Germany.

Policies and ethics