Business Ethics After The Global Financial Crisis The global financial crisis (GFC) that began in 2007 concentrated attention on the morality of banking and financial activities. Just as mainstream businesses became increasingly defined by their financial performance, banks, it seemed, got themselves—and everyone else—into trouble through an over-emphasis on themselves as commercial enterprises that need pay little attention to traditional banking virtues or ethics. Although the GFC had many causes, criticism was legitimately levelled at banks over the ethics of mortgage creation, excessive securitisation, executive remuneration and high-pressure customer sales tactics, amongst other things. These criticisms mirror those that have been levelled at business more generally, particularly in the last decade, although the backdrop provided by the GFC is more dramatic and the outcomes of supposed wrongdoing more severe. This book focuses on business ethics after the GFC, not on the crisis itself but how we should respond to it. The GFC has focused minds on the proper role of ethics in the understanding and conduct of business activity, but it is essential to look beyond the crisis to address the deeper challenges that it highlights. The aim of this volume is to present examples of the latest philosophically informed thinking across a range of ethical issues that relate to business activity, using the banks and the GFC—the consequences of which continue to reverberate—as a point of departure. The book will be of great value to researchers, academics, practitioners and students interested in business, ethics in general, and business ethics in particular. Christopher Cowton is Professor of Financial Ethics and former Dean at Huddersfield Business School, University of Huddersfield, UK. James Dempsey was, from 2012 to 2015, Research Fellow on the UK Arts and Humanities Research Council major project FinCris on moral responsibilities in the financial crisis. He started his own business in 2016, which he endeavours to run ethically. Tom Sorell is Professor of Politics and Philosophy at the University of Warwick, UK, where he leads the Interdisciplinary Ethics Research Group. He led the UK Arts and Humanities Research Council major project FinCris on responsibilities in the financial crisis (2013–2016). Routledge Studies in Business Ethics Originating from both normative and descriptive philosophical backgrounds, business ethics implicitly regulates areas of behaviour which influence decision making, judgment, behaviour and objectives of the leadership and employees of an organization. This series seeks to analyse current and leading edge issues in business ethics, and the titles within it examine and reflect on the philosophy of business, corporations and organizations pertaining to all aspects of business conduct. They are relevant to the conduct of both individuals and organizations as a whole. Based in academic theory but relevant to current organizational policy, the series welcomes contributions addressing topics including: ethical strategy; sustainable policies and practices; finance and accountability; CSR; employee relations and workers’ rights; law and regulation; economic and taxation systems. The Ethics of Neoliberalism The Business of Making Capitalism Moral Peter Bloom Integrity in Business and Management Edited by Marc Orlitzky and Manjit Monga Corporate Social Responsibility in Emerging Economies Reality and Illusion Cosmina Leila Voinea and Cosmin Fratostiteanu Neoliberalism, Management and Religion Re-examining the Spirits of Capitalism Edward Wray-Bliss Business Ethics After The Global Financial Crisis Lessons From The Crash Edited by Christopher Cowton, James Dempsey, and Tom Sorell For more information about this series please visit: http://www.routledge.com Business Ethics After The Global Financial Crisis Lessons From The Crash Edited by Christopher Cowton, James Dempsey, and Tom Sorell First published 2019 by Routledge 52 Vanderbilt Avenue, New York, NY 10017 and by Routledge 2 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN Routledge is an imprint of the Taylor & Francis Group, an informa business © 2019 Taylor & Francis The right of Christopher Cowton, James Dempsey, and Tom Sorell to be identified as the authors of the editorial material, and of the authors for their individual chapters, has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. Library of Congress Cataloging-in-Publication Data A catalog record for this book has been requested ISBN: 978-1-138-33050-4 (hbk) ISBN: 978-0-429-44783-9 (ebk) Typeset in Sabon by Apex CoVantage, LLC Contents List of Contributors Acknowledgements 1 Introduction CHRISTOPHER COWTON, JAMES DEMPSEY AND TOM SORELL 2 Is Financialisation a Vice? Perspectives From Virtue Ethics and Catholic Social Teaching ALEJO JOSÉ G. SISON AND IGNACIO FERRERO 3 On the Morality of Banking, the Exploitation Tradition and the New Challenges of the Global Financial Crisis ADRIAN WALSH 4 How Competition Harmed Banking: The Need for a Pelican Gambit THOMAS DONALDSON 5 Contemporary Laws and Regulation: An Argument for Less Law, More Justice RONALD DUSKA AND TARA RADIN 6 Freedom in Finance: The Importance of Epistemic Virtues and Interlucent Communication BOUDEWIJN DE BRUIN AND RICHARD ENDÖRFER 7 Aristotelian Lessons After the Global Financial Crisis: Banking, Responsibility, Culture and Professional Bodies CHRISTOPHER MEGONE 8 Professional Responsibility and the Banks CHRISTOPHER COWTON 9 Liability for Corporate Wrongdoing JAMES DEMPSEY 10 The Bankers and the ‘Nameless Virtue’ TOM SORELL 11 Moralising Economic Desert ALEXANDER ANDERSSON AND JOAKIM SANDBERG Index Contributors Alexander Andersson is a PhD candidate in the Department of Philosophy, Linguistics and Theory of Science at the University of Gothenburg, Sweden. Christopher Cowton is Professor of Financial Ethics and former Dean at Huddersfield Business School, University of Huddersfield, UK. Boudewijn de Bruin is Professor of Financial Ethics in the Faculty of Philosophy at the University of Groningen, The Netherlands. James Dempsey was, from 2012 to 2015, Research Fellow on the UK Arts and Humanities Research Council major project FinCris on moral responsibilities in the financial crisis. He started his own business in 2016, which he endeavours to run ethically. Thomas Donaldson is Mark O. Winkelman Professor of Legal Studies & Business Ethics at the Wharton School of the University of Pennsylvania, Philadelphia, United States. Ronald Duska, now deceased, was former Charles Lamont Post Chair of Ethics at The American College as well as an emeritus professor of Rosemont College, United States. Richard Endörfer is a PhD candidate in the Department of Philosophy, Linguistics and Theory of Science at the University of Gothenburg, Sweden. Ignacio Ferrero is Professor of Business Ethics and Dean of the School of Economics and Business at the University of Navarra, Pamplona, Spain. Christopher Megone is Professor of Inter-Disciplinary Applied Ethics at the University of Leeds, UK.