The ethical stance in banking [Elektronische Ressource] / vorgelegt von Jesús Simeón Villa

Villa, Jesus Simeon Villa

Sujets

• Wissenschaft

Informations

• Publié par: ludwig-maximilians-universitat_munchen
• Publié le: 01 janvier 2010
• Nombre de lectures: 126
• Langue: English
• Poids de l'ouvrage: 1 Mo

Extrait

The Ethical Stance in Banking

Inaugural-Dissertation
zur Erlangung des Doktorgrades
der Philosophie an der Ludwig-Maximilians-Universiät
München


vorgelegt von



Jesús Simeón Villa

aus

den Philippinen

2010





Referent: Prof. Dr. Wilhelm Vossenkuhl
Korreferent: PD Dr. Stephan Sellmaier
Tag der mündlichen Prüfung: 19.07.2010 Acknowledgements

This thesis is especially dedicated to my wife, Joy, whose loving encouragement has
enabled me to envisage and achieve my doctoral contribution to the field of ethics.
I wish to express my gratitude to all those who made it possible for me to
complete my thesis. Above all, I am deeply indebted to Prof. Dr. Wilhelm
Vossenkuhl for providing me excellent advice and support as my supervisor and
subsequent examiner, to Prof. Jeff Malpas of the University of Tasmania for his
attentive supervision and positive suggestions. I am similarly grateful to PD Dr.
Stephan Sellmaier for allowing me to work in the Münchner Kompetenzzentrum
Ethik and for agreeing to be my second examiner, and to Prof. Dr. Tobias Döring for
his encouragement and agreement to act as my third examiner.
Special thanks go to all the individuals, financial institutions, and regulators in
Hong Kong and Australia for their participation in my empirical research, and to
Vernon Moore and John McCleod for their assistance therewith.
There are many others to whom I owe my gratitude for their contribution: Dr.
Valerie Hazel for valuable assistance on formatting; my daughter, Giselle Villa-
Hansen for reviewing and merging my documents: Dr. Brita Hansen for proofreading;
Kristine Hinterholzinger for her help on the Zusammenfassung.
Contents
ABSTRACT ...................................................................................................................................................1
PART A. APPROACHING BANKING FROM A PHILOSOPHICAL PERSPECTIVE...............3
CHAPTER 1. GLOBAL CREDIT CRISIS..............................................................................................3
A. APOCALYPSE.........................................................................3
B. PARADISE LOST.....5
C. BANKS AND HOUSEHOLD DEBT ...........................................................................8
D. JUDGMENT ON THE BANKS...................................................9
CHAPTER 2. VIEWS OF BANKING ETHICS11
A. DEVELOPMENT OF MODERN BANKING ..............................................................................................11
B. NECESSITY FOR BANKS IN CONTEMPORARY PERIOD........................................12
C. USURY .................................................................................................................15
D. PROFIT MOTIVE...18
E. UTILITARIANISM..................................................................................................23
F. CATEGORICAL IMPERATIVE................................................25
G. CATEGORICAL IMPERATIVE IN BANKING ETHICS..............29
H. SOCIAL CONTRACT THEORIES............................................................................35
H. 1. Contractarianism.................... 35
H. 2. Contractualism........................................................................................................................ 38
H. 3. Social Contract Methodology in Business Ethics.................................. 41
I. VIRTUE ETHICS.....43
J. SPECIFIC CONCERNS IN FINANCE AND BANKING ETHICS...................................45
PART B. THE IDEA OF ETHICS IN BANKING: SELF CONCEPTIONS AND CRITIQUE...50
CHAPTER 3. ETHICAL UNDERSTANDING IN THE BANKING SECTOR..............................50
A. RETAIL DEPOSITS................................................................................................................................51
A. 1. Trust......... 53
A. 2. Product Differentiation........... 54
B. CREDIT CARDS AND PERSONAL LOANS.............................64
C. HOUSING MORTGAGE LOANS.............................................................................................................80
D. CORPORATE FINANCE.........................96
E. FOREIGN EXCHANGE AND SECURITIES TRADING........... 108
F. CODE OF CONDUCT .......................................................................................................................... 118
G. BANK SELF-ASSESSMENT................ 129
CHAPTER 4. SELF-GOVERNANCE AND STATE REGULATION .......................................... 136
A. CODE OF BANKING PRACTICE ......................................................................... 136
B. REGULATION IN HONG KONG.......................................... 142
B. 1. Financial Crises in Retrospect..............................142
B. 2. The Hong Kong Monetary Authority.....................................................................................144
B. 2.1 Credit Cards ....................................................................... 149
B. 2.2 Housing Loans... 150
B. 2.3 Negative Equity Problem .................................................................................. 150
B. 2.4 Supervisory Stance............................................................ 152
B. 3. Attitude of Banks towards HKMA .........................................................152
C. REGULATION IN AUSTRALIA............................................ 156
C. 1. Deregulation, Banking Crisis, and Recession...................................................................... 156
C. 2. New Regulatory Model.......... 163
C. 3. Attitude of Australian Banks Towards Regulators...............................165
CHAPTER 5. PRELIMINARY CONCLUSIONS............................................................................. 172
A. DIMINUTION OF RESPONSIBILITY .................................... 172
i B. DEPARTURE FROM FAIRNESS........................................................................................................... 174
C. OPACITY OR TRANSPARENCY?........ 181
PART C. HARSH REALITIES AND CRITIQUE OF BANKING ETHICS ............................... 185
CHAPTER 6. THE SUB-PRIME CRISIS: AN ETHICAL FAILURE?........................................ 185
A. EVICTION FROM HOMES .................................................................................. 185
B. SUB-PRIME MORTGAGES ANALYSED.............................................................. 190
C. HOUSING MELTDOWN...................... 192
D. ORIGINS OF CHAOS .......................................................................................... 194
D. 1. Financial Wizardry................................................196
D. 2. Upsurge in Securitisation...................................... 197
D. 3. Unexpected Occurrences....................................... 199
CHAPTER 7. IMPACT OF SECURITISATION.............................................. 201
A. METAMORPHOSIS OF BANKING....................................... 201
B. IMPLOSION OF THE SUB-PRIME MARKET........................................................ 203
C. LOSS OF TRUST................................................................. 205
D. MUTUAL MISTRUST AND CREDIT SQUEEZE................................................... 208
E. PANIC IN THE MARKETS................................ 210
F. INITIAL AMERICAN POLICY REMEDIES............................................................ 212
G. BANKING COLLAPSE AVERTED....................................................................... 214
H. ACCOMPLICES IN BUBBLE ARCHITECTURE.................... 217
I. ETHICAL DEFICIENCY OR SELFISHNESS............................ 218
CHAPTER 8. CONCLUSIONS ............................................................................................................ 220
A. FORGETFULNESS OF RESPONSIBILITY ............................................................................................. 220
B. INJUSTICE ......................................... 225
B. 1. Rational Actor Theories........................................ 226
B. 2. Deficiencies of the Rational Actor Paradigm....................................... 231
B. 3. Misguided Risk Management................................. 235
B. 4. Abandonment of Prudence..... 236
B. 5. Initial Market Reception........................................ 238
B. 6. Contagion................................................................239
C. CHALLENGES TO INTEGRITY............................................ 240
D. PROGNOSIS FOR THE FUTURE.......... 243
D. 1. Ethical Pluralism...................................................................................243
D. 2. Glimmer of Hope....................................................245
D. 3. Implications for Action.......... 248
APPENDIX A............................................................................................................ 251
INTERVIEW WITH BANK CHIEF EXECUTIVES........ 251
(Questions Presented at Interviews) ...............................................................................................251
APPENDIX B..............................................