The Two Opposing Views of Investment Banking Ethics

John N. Reynolds and Edmund Newell

Chapter 5 in Ethics in Investment Banking, 2011, pp 63-74 from Palgrave Macmillan

Abstract: Abstract In Chapter 3, we proposed that deontological ethics should be of primary importance in investment banking. We also identified five key questions that should inform ethical decision-making. Two of these, grounded in deontological ethics, are as follows: who are the stakeholders, and what duties are they owed? and what rights are relevant in the situation, and what bearing will they have in making a decision? The high-profile investigation of Goldman Sachs over the marketing of ABACUS, a mortgagebacked security, highlights these two questions. In particular, as the following comments suggest, a key ethical issue in investment banking is what weight should be given to duties to stakeholders relative to a firm’s rights?

Keywords: Intellectual Property; Market Participant; Credit Default Swap; Investment Bank; Market Maker (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-34885-1_5

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DOI: 10.1057/9780230348851_5

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