A report by the Economist magazine on the financial services industry finds that 53% of executives in that industry say that employees who try to adhere to strict ethical standards hurt their own careers. In other words, in banks and stockbrokers, unethical behavior is routinely rewarded.
I don’t know what scares me more: the 53% who are willing to admit that what they are doing is unethical, or the rest of them who are not.
And in the Guardian, a former Wall Street trader explains why. The problem is that you can make a lot of money by cheating people, and the risks are minimal:
After a few years on Wall Street it was clear to me: you could make money by gaming anyone and everything. The more clever you were, the more ingenious your ability to exploit a flaw in a law or regulation, the more lauded and celebrated you became.
Nobody seemed to be getting called out. No move was too audacious. It was like driving past the speed limit at 79 MPH, and watching others pass by at 100, or 110, and never seeing anyone pulled over.
As Wall Street grew, fueled by that unchecked culture of risk taking, traders got more and more audacious, and corruption became more and more diffused through the system. By 2006 you could open up almost any major business, look at its inside workings, and find some wrongdoing.
After the crash of 2008, regulators finally did exactly that. What has resulted is a wave of scandals with odd names; LIBOR fixing, FX collusion, ISDA Fix.