Ethics and financial services


Sir, – The ongoing issue of homeowners moved off their tracker mortgages unjustly continues to erode confidence in the banking sector. There continues to be widespread scepticism and concern about the sector as to its underlying ethical principles and consumer focus. It seems to many that the sector is, for the most part, singularly profit focused. The consumer is often viewed as commercial fodder to increase profitability and protected, not by any ethical standards or principles, but only by a reluctant compliance culture and by the enforcement of same by the regulator. It is therefore timely that there should be a comprehensive debate on the underlying moral and ethical principles which underpin this sector so that public confidence can be restored.

The Central Bank of Ireland, through its consumer codes, endeavours to inculcate a culture that has acting “honestly, fairly, and professionally with due skill, care and diligence in the best interest of its customers” as the ethical bedrock upon which all activity should be measured while having due regard to the integrity of the market. While these basic principles underpin the Central Bank’s Consumer Code of 2012, the sector is encouraged in the code to abide by them in that spirit when applying the other requirements the code contains. This of course requires a cultural change in the sector. The Central Bank’s efforts in this regard seems to be having little or no impact.

Ethics in moral philosophy refers to the study of the actions and thoughts that are right and wrong as opposed to actions that are perfectly legal and meeting all compliance requirements. It has to do with the values that relate to human conduct. Ethics, in this context, is therefore much wider that complying with regulatory and legal codes. Ethics has to do with the spirit and the principles upon which codes are built. If you stay within the law and abide by the regulations, you are responding to measures that had to be put in place because of a breakdown or an erosion of ethical standards. It is to get people and institutions to stay on or above a minimum standard of decent customer interaction and fairness that legislators and regulators put rules in place with penalties for non-compliance. So, for example, the ongoing revelations surrounding tracker mortgages illustrates how far lenders can drift from best practice where the culture of the organisation is not in proper balance. So a “can we get away with it?” attitude can be what prevails.

A fundamental question therefore to be addressed is why does this sector exist and what is its purpose? Is it just to maximise shareholder value or has it primarily to serve the community in which it operates? If these fundamental questions are not answered and an appropriate balance achieved, then the ethical issues that should be addressed will not be, and so the right or wrong approach to decision-making at all levels in the sector will be at best unclear, and confidence will continue to be severely impacted. – Yours, etc,



Dublin 3.