5/7/2023 0 Comments Supermind joe pictureIt contends that professionalization could help to develop bankers with a professional, pro-social identity, in which there is a recognition of broader obligations to society, that exists independently of the profit-driven nature of banking and the hierarchy of their own firms (Grant, 2007 Grant & Berg, 2012). Drawing on experiences in the UK, Australia, and Ireland, three common law jurisdictions at various phases of developing “an ethical esprit de corps” to professionalize the banking industry (Skinner, 2021), it argues that adopting some aspects of a profession, a “trajectory towards professionalization” of the banking industry, could serve, at least to some extent, to improve the industry-wide norms that influence firms' cultures and individual behaviors (Parliamentary Commission on Banking Standards, 2013a). This article addresses the issue of renewing a sense of vocation in finance. He argues that a “more comprehensive, lasting solution combines public regulation with private standards” this would involve three components: aligning compensation with values, increasing senior management accountability and “renewing a sense of vocation in finance” (Carney, 2021, p. Similarly, the former Governor of the Bank of England, Mark Carney, argues that an approach based on total regulation and large ex post sanctions is “bound to fail because it promotes a culture of complying with the letter of the law, not its spirit and because authorities will inevitably lag developments in fast-changing markets” (Carney, 2021, pp. As observed by the Financial Conduct Authority (FCA) in the UK, “he evidence that we have suggests that there are limitations on the extent to which greater compliance can be achieved by increasing fines and the probability of detection” (Iscenko et al., 2016). Despite very high fines imposed for banking misconduct over the last decade (Busetto et al., 2019), behaviors seem not to have improved. A former Deputy Director of the Bank of England, Minouche Shafik, described the problem as an “ethical drift” in the financial services industry internationally and stated that misconduct was “not a case of a few bad apples, but something was rotten in the entire barrel” (Shafik, 2016). The LIBOR, Wells Fargo, and various money-laundering scandals are but a few of the well-publicized scandals (Jordanoska & Lord, 2020 Ochs, 2016). Misconduct has been a significant and growing problem internationally in the financial services industry for many years. This analysis is informed by an integration of regulatory theory, which casts doubt on the utility of sanctions except as a last resort, behavioral science, which offers insights into how ethics and culture, not just law and markets, can constrain irresponsible behavior in the financial services sector, and criminological theory, which emphasizes that particular types of controls, including individual attachments to groups, build “stakes in conformity” which encourage law abiding and responsible behaviors. It contends that professionalization could help to develop bankers with a professional, pro-social identity, in which there is a recognition of broader obligations to society, that exists independently of the profit-driven nature of banking and the hierarchy of their own firms. Drawing on experiences in the UK, Australia, and Ireland, three common law jurisdictions at various phases of developing “an ethical esprit de corps” to professionalize the banking industry, it argues that adopting some aspects of a profession, a “trajectory towards professionalization” of the banking industry, could serve, at least to some extent, to improve the industry-wide norms that influence firms' cultures and individual behaviors.
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