An ethics code for bankers?

“A Code of Ethics for Bankers – Challenges and Opportunities” argues that the guidance given to bankers by current industry-wide ethics rules has been too vague to provide them with clear and practical guidance or too limited to cover their key ethical challenges. Robert Mass proposes instead to develop a workable ethics code by grounding it in our ethical intuitions, suitably refined and tested by reason. In making that case, he examines Aristotle’s criticisms of rules as inevitably producing unethical results in some cases, David Hume’s archeology of how moral sentiments arise from well-accepted social practices, and John Rawls’ analysis of how to bring our moral sentiments and ethical principles into a “reflective equilibrium.” He then uses those perspectives to examine social practices in banking. He starts by describing the practice of mutual promising, which he argues is at the core of all business, including banking. Beyond that, he argues, the banking business is so diverse that an understanding of banking ethics requires us to identify distinct ethics frameworks, for different segments of the banking world. In particular, three core social practices, game-playing, persuasion and guardianship, provide the ethical frameworks practitioners intuitively understand apply to trading, sales and investment management, respectively, and it is those frameworks which should form the basis of ethical codes for those practitioners. He identifies some of the ethical rules that apply in each of those areas and examines the roles that “playing by the rules,” helping competitors, sincerity, bias, fairness, competence, conflicts of interest, and other factors play in those practices – with a focus on ethical dilemmas and edge cases. Finally, he discusses the role that a call to engage in compassionate and other supererogatory acts should have in the development of an ethics code and the dangers of using an ethics code as a vehicle to try to further social policy.