Ethical Banking

Ethics and fairness are increasingly being recognised as topics of interest in finance, particularly with respect to banking and the relationship to investors and customers. Our thinking starts with "why build an ethical framework for banking if there are no ethical questions to answer?” What questions are worth pondering before seeking to set out an ethical framework or set of principles. “Is free banking ethical?” “Should banks quote APR on overdrafts?”
Long Finance's interest is in exploring what makes a 'Good Bank'. A Good Bank needs to be operationally good, i.e. a commercially successful vehicle for shareholders and other investors, as well as ethically good, i.e. acting correctly towards mankind. These two forms of good might be in opposition. Perhaps the biggest dilemma in providing an ethical framework is ascertaining the role of competition in such a framework. Ethically, it may be essential for a bank to promote increased bank competition.

Thus, we ask the following questions:

  • Who needs good banks?
  • What is an ethical framework?
  • Where do we need an ethical framework?
  • When would an ethical framework make a difference?
  • Why is an ethical framework insufficient?
  • How might we make a difference?

Possible answers and thoughts on these questions were presented during a lecture at the London South Bank University in March 2014.

Related Project - Fairbanking

Since 2011, Z/Yen Group and Long Finance have conducted research to assist the Fairbanking Foundation, an independent research-based charity dedicated to encouraging and helping retail banks improve the financial well-being of their customers. The Foundation regularly publishes ratings of financial products based on how well they serve customers and recently became the first accredited body for financial products in the UK. More information...

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