Business ethics are very important any sort of business worldwide. In the given case also there are some ethical issued that has been observed. The first ethical issue arising, in this case, is the transparency (Gavai, 2010). There are two types of rates of interests maintained by the bank one is for the depositors and another is for the borrowers. Moreover, the banks also have a different rate of interest gained in cases when they are investing the money of the customers in the market for the benefit of the banks. There is also a different rate involved in the case of the bank to bank transactions. So, in this case, this was the main issue where different banks of London could not maintain the transparency of the rates to LIBOR. The second was that they could not maintain their faithfulness either to the customers or to the government. The difference in the rates also brought loss and bad name to their name in the markets. Many banks were involved in this scandal. The third was that they became very selfish in thinking of themselves in the market than of the customers (Duska, 2000). The most important business ethic is a satisfaction to the customers and maintaining loyalty with them. But here in the above-mentioned case the bankers only thought of their profit. Yes, it is important for any firm to look at their profit scale but not at the cost the faith and loyalty of the customers. In any business the first criteria are honesty. For this reason, there is also a saying "Honesty is the best policy", which is the first preference for any firm. This thing should be maintained by any firm up to an extent. It is known that every business has some norm hidden from the law but it is not business policy. The business ethics are very important for any type of business. And here in the business of bank loyalty and honesty is the main source of income and gaining customers and also fame ("Ethical Issues in Business: Perspectives from the Business Academic Community", 2004).
The Trader’s Ability to Impact the Interest Rate Benchmark Represents a Conflict of Interest. Discuss.
The above statement is very true because in any business there should be some kind of ethics and policies that should be followed universally by all the business firms as a whole. For this reason, every country has its own rules and regulations for the businessmen. The trader should not get the whole authority, regarding, rules for running the business. Here in the given case, the main problem was that the traders were given the full right and authority of setting rates of interests in the market (Duan, Wei, & Chen, 2014). Every trader will think about their own benefit. And if the trader is dishonest then he will not even think twice before with his customers also. Here LIBOR had given the liberty to the bankers for setting their rates of offered interests. So the bankers while playing with the business ethics even forgot one thing that, it is the bank's rates which determine the economic status of the country. The LIBOR involves many banks transactions and their rates determined. So, toying with the rules would not only bring down the economy of the country but also of the world as a whole as because banking involves not only interest of the customers but also of many corporate firms handsome amounts dealings (Vasudev & Rodriguez Guerrero, 2014).
So, it is justified if the full authority of anything should not be given to any firm as a whole. This decreases their loyalty and honesty towards the dealers. Because a trader can only think about the profits, so, it may happen that while thinking about the profit of their firm they might just neglect or overlook the interests and responsibilities of them towards humanity and government and the world. Here, the benchmark of setting the rates was given to them. So, this is what happened in the end, what we give the name of scandal (Bahaji, 2014).
In the above scandal, it was seen that the bankers individually thought about their profit issues. Here the bankers thought only about their own interests and benefits. The manipulation of the rates was also one big issue. For growing their business they even tried to manipulate the rates (Chang & Gong, 2013). Not only that they even tried to encourage other regarding manipulation of their rates to increase the profit margins. Many big names of banks like Citigroup, Royal Bank of Scotland and Deutsche Bank were involved in this scandal. Their greed leads them and also their country to such a level of scandal.
The intention of the traders was not at all clean in the above case. They were very greedy and self-centred people who only thought about their own interest of benefits. They were least bothered about their surroundings. It is very obvious where there is a big amount of money involved it ends up into some or the other scandal (Cohen & Khermouch, 2002).
A true profession involves some morals ethics that gives it the reputation and fame. If there is no honesty in any business then that business does not flourish far in the future. Here we see that for the time being the traders had earned a lot by ditching the customers, ditching the government, ditching inter-bank relationships but at the end, the result was as expected. They all had to pay billions of money fines (Springer, 2016). There were many legal allegations imposed on them. Their name also got bad in the market. It takes a huge effort and time to bring up any business and continue it in the market. But it can take only a few seconds to lose everything that also at one go. Regaining everything shall be like starting from zero. Because if someone is new in the market people give them a chance and if they like it then they accept that firm and entrust them with faith. But if a good firm loses its name then it becomes difficult for any person to put faith that firm again. The traders had to pay for their once benefitted firm by losing a huge amount of money as fine.
Utilitarianism - It is truly said that "As you sow, so you reap". Here in the above case, we see that whatever the traders had done in the name of profit was actually their individual greed in every stage of organization. They had to face the consequences which were indeed very horrifying. They had to pay a large amount of fines which included billions and billions of money. In some banks, it was seen that when they actually got to understand the mishap they have come up to, it was too late (McConnell, 2013). They could not do anything. They were also imposed with legal charges and fines. So, every trader should think about the consequences before opting for any negative means of business.
Deontology - The moral ethics of every person get affected when the thought comes to the big amount of money. But this is not applicable for all the human beings. This is because moral ethics vary from person to person. This has no relation to the firm or company in the individual in involved. If a person is honest then no one can ruin his ethics with any amount of money or luxury. But if a person is dishonest then, he or she can show dishonesty in any way. Here also the same thing happened. In the above case, no individual can be blamed for the mishaps in the accounts. The workers as a whole are to be blamed (Ashton & Christophers, 2015).
Virtue ethics - Though it is true that the virtue ethics of every person remains same no matter what happens. But it is not fully true. Sometimes if a person is working in any firm then that person has no individuality there. He or she has to abide by the happenings in his or her firm whether it is liked or not liked. In any job, every person has to listen to their seniors. So even if the junior thinks that the decisions taken are wrong or tries to oppose anything then that person has to lose the job. So, sometimes need for the job also leads people in the path of negative deeds. Hence it can be said that in the above scandal, also people who were joined with the firm but may be not be included in the scandal but had to suffer for all (CRISP, 2010).
Banks are run by people and people are greedy of money. So, the traders cannot only be blamed for the scandal. The interest of the banker also brought about this scandal. Every bank owner thought about the profit of their bank. Moreover, the people working in the bank also found it profitable for them so they also joined hands with them without any second thought. Every individual entity of the bank took an interest, starting from the higher to the lower post are involved the success of this scandal. No one ever thought about the consequences they might have to face at the end (Hicks, 2010).
The job of the traders is to trade in money. It is their duty to think about the money only. The traders work under the bank for money dealings. They confirm the dealing, get their share and run off. It is the banks which remain. It is the firm who always has to face the consequences. At the end the traders did not have to pay the fine, the bankers had to. The traders showed them the negative path and took their share. But the bank had to suffer at the end. So no individual can be blamed in these cases. It goes like a chain of blames ("Banker, speculator, or gambler?", 2011).
As it is told earlier also that it take seconds to lose trust but it takes decades to make it. And losing the made trust and regaining it is another big responsibility and hardship. Like, in the case of mishaps the whole firm including every employee has to pay for it, similarly while getting back the trust also every individual has to put in their effort to regaining it. It is always a group effort (Farla, 2014).
While regaining trust the initial phase of gaining trust, in the beginning, seems easier. It means that people think that the time when they had started the business when people never knew about their firm, that moment was easy. But in the case of regaining, the things change. People knew you, you had their trust, and they had bestowed their faith in you. But you had spoiled everything. Now they do not trust you. They hate you. So this phase is very harder.
Thought regaining part is hard but not impossible. The patience which one had, in the beginning, needs to be given a boost. One has to be more patient and accept the faults and maintain transparency and invest more effort in service. In the beginning, it might seem time-consuming but with great enthusiasm and zeal, it can be achieved. They have to regain the trust and faith in them. They have to convince them by any means that they have changed. This cannot be done by speeches but with deeds. They have to show again and again that they have settled their issues (Mishkin & Eakins, 2009). It might take years also but can be achieved. They have to promote in a positive way and give people that positive hope and faith that will return their old as well as new customers to them. Some new policies that might bring initially less profit but gradually it shall help them regain their lost name and fame.
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