Ethical issues in the banking industry : a comparative analysis of Maltese banks

Abstract

Writing this dissertation on Ethics in Banking has been a special challenge. It was not because of the lack of subject material, but because rules and a high level of integrity govern this sector, and much is expected of the people who bear the great responsibility. Why Ethics? Why is it important today for Banks to conduct themselves in a prudent and honourable manner? While money is the life-blood of Banking and the service is the heart, ethics is the soul of Banking. Ethics deals with what is good and bad, moral duty and obligation. During the 1980s and 1990s there was an ever-growing concern about the lack of ethical behaviour in financial services institutions, resulting in academics and practitioners to increase the awareness of ethics in the industry. Unethical behaviour in Banking resulted from fraud and negligent misrepresentation. The role of ethics in information and the disclosure of private information play key roles in resolving these problems. Good reputation is an important intangible asset to any business, and especially to banks, who depend more heavily on trust and confidence for their business. The aim of the dissertation is to highlight the importance of ethical banking and that it is not an easy job. This dissertation is structured in six chapters. Chapter one gives an introduction to the Banking industry, showing how it has changed over the years through drivers such as information technology, deregulation, globalization etc. Chapter two enters the world of ethics, first introducing its importance as a business concept, and then giving its value in Banking. Chapter three discusses the relevant ethical issues one can find in banking. Chapter four then elaborates on the importance of the code of ethics and how to develop an ethical banker with related competencies. Chapter five shows the analysis on Ethics in Maltese Banks. Chapter six gives my personal perspective on the information obtained from my research and concluding on the future of ethics in banking.