Information Transparency as a Differentiation Factor of Ethical Banking in Europe: A Radical Affinity Index Approach

Leire San-Jose () and José Luis Retolaza

The IUP Journal of Bank Management, 2008, vol. VII, issue 3, 7-22

Abstract: This paper seeks to analyze the principal differences between ethical banking and the rest of funding organizations—banks, saving entities, credit cooperatives. With this aim, the paper first defines the essential characteristics of ethical banking—maximum social participation, efficient and professional management, transparency as a fundamental value, the existence of an ethical code, the inversion of assets in projects with an abiding social value and global measure. Furthermore, with the aim of providing the contrast among the funding organizations, the paper proposes an index, ‘Radical Affinity Index’, which is focused essentially on the responsibility of lenders with regard to the decisions on the final use of funds. Once obtained, the index makes it possible to compare the classification of banking groups metrically. Therefore, the paper used a part of the index—transparency—as the first differential factor of ethical banking, to evaluate the hypothesis—there are significant differences in informative transparency between ethical banking and traditional banking.

Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:icf:icfjbm:v:7:y:2008:i:3:p:7-22

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