Can Bankers (Be Made to) Behave?
5/22/2015 12:57 PM
By Dan Sweeney
Director, Institute for Enterprise Ethics
William D. Cohan, author of House Cards
and Money and Power
and contributor to many major periodicals on topics of finance and Wall Street wrote a powerful piece in the May 2015 edition of The Atlantic magazine addressing just this question – “Can bankers Behave?” His answer appears to be yes, but it’s not likely. Cohan asks if “Wall Street’s deepest flaws (might) be cultural, promulgated over generations by leaders who have chosen to reward those who cut corners, stab colleagues in the back and engage in otherwise unethical behavior?”
The financial industry and its culture has been chastised by the likes of Mark Carney, governor of the Bank of England; Christine Lagarde, the managing director of the International Monetary Fund; and William Dudley, president of the New York Fed, all suggesting, in Dudley’s words that if the banks don’t significantly change their culture-led behavior “…the inevitable conclusion will be reached that your firms are too big and complex to manage effectively. In that case financial stability concerns would dictate that your firms need to be dramatically downsized and simplifies so they can be managed effectively.”
But it appears that only one major Wall Street bank has taken any significant steps in the suggested direction. Morgan Stanley, under the leadership of James Gorman has taken a series of dramatic steps to drastically change its business and its culture becoming “…a fundamentally different firm than we were seven years ago” according to their then CFO, Ruth Porat.
To read the entire Cohan article, click here.