module six Flashcards
Impact of unprofessional and unethical behaviour
undermines the trust in financial organisations and can trigger instability in the economy
Chartered bankers strategic purpose
a view to rebuild trust and confidence in banks
Rules-based code
defines the rules expected to be followed leaving little room for misunderstanding.
Principles-based code
They are more flexible meaning professional judgement is needed.
The code
expected to work in a fair and honest manner if breaches the code they could be subject to disciplinary action
Principle 1
Customers - treating with respect includes being polite in all forms of communication, also includes being sensitive to circumstances and specific needs
Colleagues - disrespectful behaviour includes bullying and harassment as well as treating colleagues unfairly or discriminating against them
Counterparties - respecting counterparties also involves not deceiving them. Also, entering a manipulative or exploitative financial relationship with anyone would be disrespectful.
Respect - treating people respectfully not only face to face but behind their backs too as well as challenging other colleagues on their behaviours.
Integrity - maintaining consistently high moral standards.
Principle 2
Duty to be competent - an ethical duty because customers and counterparties have a right to expect competency.
Taking responsibility - failing to act responsibly is unethical because if things go wrong it effects everyone. It’s important everyone’s responsible in their actions and advice but also take responsibility for their implications for others especially if a mistake is made.
Being accountable - your responsible for the things that happen as a result of your actions.
Principle 3
Compliance - requirement bankers are open and cooperative with regulators providing with any information they require.
Openness - not only must they never mislead the regulators, they must cooperate in a genuine spirit of openness.
Principle 4
Identify customers interests - deciding what’s in a customer’s interest involves listening to their description of their needs and circumstances and applying expertise to whatever products/services they may be considering.
Apply judgment - apply judgement and read between the lines of what the customers saying to some extent.
Pay due regard - don’t do something unethical because it’s in your customers interest as it would be paying their interests more regards than due.
Be impartial and fair - includes not allowing personal interests to get in the way of the customers interests.
Principle 5
Ensure that behaviour doesn’t get in the way of the good and fair operation of markets.
Principle 6
Honesty - dishonest behaviours include intentionally deceiving or misleading people as well as including cheating behaviours.
Trustworthiness - crucial to the success of banking so customers can trust banks.
Impartiality - conflict of interest arises when a personal interest conflicts with a legitimate duty. Conflicts of interest threaten impartiality and ability to fulfil duties of your role.
Principle 7
Confidentiality - confidential information may not always be marked as confidential. There may be circumstances someone may ask you to keep information confidential however you have no duty to do so as in some circumstances a breach of confidentiality may be justified.
Ethics
Encourage thoughts around living a good life, rights and responsibilities and moral decisions.
Moral absolutism
The view that some things are always right and some things are always wrong.
Moral relativism
Says that what is right or wrong is what the majority of people view and is related to the particular place and time.
Ethics based on consequences
Utilitarianism - a theory based on consequences. ethically right choice is the one producing the most happiness for the largest number of people.