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FOS Blog

03 Aug

Code of Ethics for Bankers?

Code of Ethics for Bankers?

A new idea in banking regulation has emerged for a code of ethics for bankers, similar to oaths taken by Doctors, Lawyers, and Accountants. Even the Group of 7 leading industrial nations have weighed in favor of a code of ethics.  This would not be an easy task since banks do not just offer advice and services to their clients. Bankers can also sell their clients various products, as well as, be the in-between helping their clients’ sell products. A major hurdle for this ethical code would be that unlike other professions, Banking does not have the same kind of barriers of entry as doctors, lawyers, and accountants. This could make it hard to implement with new employees. It can also scare off potential employees to the industry. But with the great recession still on mind of people is this really a bad idea? Janet Yellen has been quoted as saying “we expect the firms we oversee to follow the law and to operate in an ethical manner. Too often in recent years, bankers at large institutions have not done so, sometimes brazenly.” So this code of ethics could serve as a compliment to regulations. Helping banks with operational risk, like keeping rogue employees in line. This could also lead to a more observant banker who does not think about his/her self-interest above their customers. This code has taken shape in some form for Dutch bankers who take an oath, to not misuse their banking knowledge; ending with “so help me God”.  In final thoughts, to an ethical institution this ethical code should have no impact on the way they do business, but how would this effect your bank?

Article written by Brandon Peart. For additional information email