RT Article
T1 Reassessing the Ethicality of Some Common Financial Practices
JF Journal of business ethics
VO 136
IS 3
SP 471
OP 480
A1 Bagus, Philipp 1980-
A1 Gabriel, Amadeus
A1 Howden, David
A2 Gabriel, Amadeus
A2 Howden, David
LA English
YR 2016
UL https://ixtheo.de/Record/1785658115
AB Depositors have perceived banks as acting unethically during the most recent recession. One area of consternation is the ambiguity of the legal obligations entailed by the deposit contract when it is backed with only fractional reserves. In this article, we apply an existing analysis of the legitimacy and ethicality of banking practices to a wider range of financial transactions, including insurance policies, securities lending, perpetual bonds, and callable loans. Securities lending in particular creates rights violations analogous to those in fractional-reserve banking. Both callable loans and perpetual bonds have clear legal obligations which are not inherently problematic, though we herein clarify what these obligations are. Finally, we apply our ethical framework to demonstrate that insurance products are distinct from banking deposit contracts, and that perceived parallels between the two products underestimate these differences.
K1 Perpetual bonds
K1 Callable loans
K1 Fractional reserves
K1 Banking
K1 Insurance
DO 10.1007/s10551-014-2525-9