An Ethical Framework

The simplest ethical guide for finance professionals should have three objectives −

●      The first is to have higher ethical standards and a more inclusive financial system.

●      The second, we should be more conscious of moral choices, but morals should not be imposed upon people in suffocating ways.

●      The third objective is to keep things simple.

We often see financial market participants hesitate a moment before deciding whether to go ahead with a transaction. It is when they assess whether the transaction makes sense, feels odd or is avoidable. In that moment, people tend to ask whether they know the individuals involved in the transaction and whether a similar transaction was made earlier.

None of the two is very exacting ethical standard. We can offer these market participants some more questions, and after that it is up to them and their companies how they behave. However, that behavior should not be so ruinous that it affects the marketplace or the economy.

The key questions to ask while preparing a transaction is − have you ever faced a situation when you have put someone at an advantage over others?

Getting a loan from a client leading to its bankruptcy when one buys up the company’s assets cheaper is not illegal, but it is unethical. Similarly, driving products out of market and making it hard to find is not always illegal, but it is unethical.

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