Educating Bankers on Law, Ethics and Social Values: A Perspective from the US, the UK and Europe

The paper questions how global businesses can alter their attitudes to make them more ethical and transparent. It examines three causes of a financial catastrophe that are linked to bankers’ attitudes and mindsets: bankers’ excessive greed that leads them to fall into ruinous temptations such as securitisation and short-termism, bankers’ behavioural limitations such as overconfidence and over optimism and finally bankers’ ignorance of financial products. The paper then considers an alternative model to confronting bankers’ deficiencies that is more sustainable in the long run: the tool of education. When there is so much disapproval of companies for their lack of corporate social responsibility, education can help significantly. Its role is three-fold: First, it can alert future leaders of the positives of acting selflessly and for socially responsible goals. Second, it can teach them of what the law actually says: that they must promote the company’s best interests – and not the shareholders’ short-term interests – a matter frequently ignored within business practice. Finally, via education future leaders can learn a thing or two about the behavioural weaknesses often characterising people in high executive positions; they can also learn about the risks of showing poor judgment and unfamiliarity with a business’ financial nuances and related risks. These ‘educational measures’ can help restore integrity back into banking whilst underlining the weight of ethics-based corporate cultures.