Ethics in the banking industry: identifying the industrial and external factors influencing behaviours in the industry

Abstract

Finance and economy, more importantly banking as a branch within finance, have a vast influence in our daily lives. History has shown that the decisions made by these institutions that were set up on one hand to provide security around the population’s wealth, and on the other to help manage and control the flow of money; can affect positively or negatively every member of society. Recently, populations around the world have suffered due to a crisis that sparked from the banking sector. This crisis has led the ethical culture in the industry as well as the role of governments and regulators to be questioned. This thesis presents an original perspective of ethics in the banking industry in the United Kingdom by analysing factors in the banking system influencing banker’s behaviour and evaluating the codes of conducts and codes of ethics of banking institutions. Using an OLS-moderated regression method, results show that certain aspects of the industry paradigm are not conducive to the preservation of ethics. It has been found that the long-term orientation, strategic aggressiveness, and competitive intensity of a bank can influence employees’ ethical behaviour. Finally, the evaluation of the codes of ethics and codes of conduct in the industry has shown important gap in the banks’ policies particularly with regards to the influence of banks strategic aggressiveness and competitive intensity on employee behaviour. This work has deep implications for further studies of ethics in the banking industry and could spark a new wave of research that will seek to formulate a proven framework to manage ethics in the industry.