Between the Chancellor and the City there is clearly a need to find the happy, though perhaps elusive, medium between risk taking in the form of trading on the one hand, and ethical behaviour, which leads to public confidence, on the other. This begs the question - can wholly ethical risk taking exist in these elements of the financial sector? Traders are, by default, gamblers: playing with other peoples' money for profit and reward. To what extent however are investors complicit in the gamble by not asking questions about 'how' that profit is achieved? If investors and traders do not regulate themselves by adopting a wholly ethical position, how will the Chancellor and the Financial Conduct Authority avoid another scandal of global proportions, and one that in the Chancellor’s own words, seriously "matters"? Ignoring the ethical debate, there is a pragmatic question about regulation and enforcement and how any proposed legal controls introduced by the Chancellor or FCA will be monitored or enforced. If current record levels in Britain's prisons (http://www.bbc.co.uk/news/uk-27836961) suggest that the threat of a jail sentence fails in many cases to deter other serious crimes being committed why should exchange traders be any different? In the minds of the criminals, do the rewards outweigh any potential risk posed by imprisonment? In relation to national reputation, prosecuting after the fact provides little compensation relative to damage. If the culture in the trading community is one of risk-taking to the point of law breaking, what are appropriate deterrent and detection devices that could be used to safeguard both the institution and the public?
Monday 16 June 2014
Mansion House Speech 2014
George Osborne in his Mansion house speech said that the "integrity of the City matters to the economy of Britain, and following on from the Libor rate fixing scandal, he now plans "to deal with abuses, [and] tackle the unacceptable behaviour" associated with the foreign exchange, commodities and fixed-income markets (Independent 13 June 2014). http://www.independent.co.uk/news/uk/politics/mansion-house-speech-chancellor-george-osborne-to-lay-out-plan-to-clean-up-the-markets-9530525.html
Between the Chancellor and the City there is clearly a need to find the happy, though perhaps elusive, medium between risk taking in the form of trading on the one hand, and ethical behaviour, which leads to public confidence, on the other. This begs the question - can wholly ethical risk taking exist in these elements of the financial sector? Traders are, by default, gamblers: playing with other peoples' money for profit and reward. To what extent however are investors complicit in the gamble by not asking questions about 'how' that profit is achieved? If investors and traders do not regulate themselves by adopting a wholly ethical position, how will the Chancellor and the Financial Conduct Authority avoid another scandal of global proportions, and one that in the Chancellor’s own words, seriously "matters"? Ignoring the ethical debate, there is a pragmatic question about regulation and enforcement and how any proposed legal controls introduced by the Chancellor or FCA will be monitored or enforced. If current record levels in Britain's prisons (http://www.bbc.co.uk/news/uk-27836961) suggest that the threat of a jail sentence fails in many cases to deter other serious crimes being committed why should exchange traders be any different? In the minds of the criminals, do the rewards outweigh any potential risk posed by imprisonment? In relation to national reputation, prosecuting after the fact provides little compensation relative to damage. If the culture in the trading community is one of risk-taking to the point of law breaking, what are appropriate deterrent and detection devices that could be used to safeguard both the institution and the public?
Between the Chancellor and the City there is clearly a need to find the happy, though perhaps elusive, medium between risk taking in the form of trading on the one hand, and ethical behaviour, which leads to public confidence, on the other. This begs the question - can wholly ethical risk taking exist in these elements of the financial sector? Traders are, by default, gamblers: playing with other peoples' money for profit and reward. To what extent however are investors complicit in the gamble by not asking questions about 'how' that profit is achieved? If investors and traders do not regulate themselves by adopting a wholly ethical position, how will the Chancellor and the Financial Conduct Authority avoid another scandal of global proportions, and one that in the Chancellor’s own words, seriously "matters"? Ignoring the ethical debate, there is a pragmatic question about regulation and enforcement and how any proposed legal controls introduced by the Chancellor or FCA will be monitored or enforced. If current record levels in Britain's prisons (http://www.bbc.co.uk/news/uk-27836961) suggest that the threat of a jail sentence fails in many cases to deter other serious crimes being committed why should exchange traders be any different? In the minds of the criminals, do the rewards outweigh any potential risk posed by imprisonment? In relation to national reputation, prosecuting after the fact provides little compensation relative to damage. If the culture in the trading community is one of risk-taking to the point of law breaking, what are appropriate deterrent and detection devices that could be used to safeguard both the institution and the public?
Subscribe to:
Posts (Atom)