A recent data-based study essay to answer the head as to whether bankers are more likely to chicane than citizenry in other professions . you could believably imagine the effect , but you ’ll be surprised as to the reason why .
There is something in the civilization of banking that lends itself toward making otherwise fairly full people do bad things . That ’s the determination of anew report publish in the diary , Nature . And it may simply support the suspicions of many follow endless news of bankers being come out of the closet for bad behaviour .
The tilt is almost too endless to mention ( but here drop dead anyway ): manipulating the foreign interchange market , LIBOR and the atomic number 79 market ; mis - sell interestingness - rate swaps , mortgage backed securities and payment protection insurance ; aiding money laundering ; disregarding sanctions on a commonwealth ; tax avoidance ; providing compromise investment advice ; trading outrage – the list could go on .
In sum , these mulct have directly be banksmore than US$ 100 billion in the US alone . Some have suggested this could before long bring the entire handbill for finessince 2008 to more than US$ 300 billion .
And , however galactic this issue sound , the mulct are just the start of it . There are legal fees , unconscious process of internal change , consultants and , of course , new risk and compliance departments which ask to be yield . On top of this , there are huge reputational costs . One late study of UK bank constitute that for every £ 1 they pay up out in finesthey drop off £ 9 off their contribution price . So banks would probably do well to address this ostensibly fundamental government issue of having a corrupt culture , as shown in this field .
Deception at the Toss of a Coin
Economists at the University of Zurich , Michel Maréchal , Alain Cohn and Ernst Fehr , rig out to hear whether banker are in fact more likely to chouse . They particularly center on whether mass who consciously thought of themselves as bankers ( and acted under this sobriquet ) were more likely to shaft than when they had their non - professional lid on . They suspected it was something about the identity of being a banker that made people more potential to cheat .
To try this head , they expect a group of the great unwashed working for a financial organization to dispatch a simple questionnaire . The respondents were divided into two groups . The first was ab initio ask a set of inquiry about their job as bankers ( such as which part they worked in ) . The second was asked about their workaday life ( such as how much television they observe ) . This primed the first group to suppose of themselves as “ banker ” ; the 2nd as “ everyday mass ” .
After this step , both groups were then asked to play a simple biz . They were asked to flip a coin ten clip and record their results . Before they flipped the coin , they were also tell if you got heads ( for illustration ) you will receive US$ 20 . Because it was an online exam , no - one could hold the results – so there was lots of elbow room for lying .
The termination were surprising . The people who were ground to think about themselves as an everyday person did not lie about their termination ( despite the fact there was copious room to do so ) . But the group who were primed to consider of themselves as bankers tend to lie significantly more – they misrepresented their results about 16 % of the time and more than a quarter of the “ bankers ” chemical group cheated .
Much of this rest and cheat can be attributed to the humble population of banker who were quite glad to rest in almost every summerset of the coin if it benefited them . But the subject indicate that by simply prompting a soul in the fiscal services manufacture to think about themselves as a banker imply they are more likely to shaft .
Identity the Crucial Factor
At this stagecoach you might object , and say that indistinguishability is not the crucial factor at work here . peradventure it was just thinking about money which lead to bad behaviour ? The study also screen member of other professions who , when prompted to think about themselves in professional condition , did not lie and cheat more . There was no deviation among the deceiver and non - cheaters in term of competitiveness .
Cheating was also not plainly the result of people think that everyone else was doing it and so it was OK . What seemed to instigate bankers to cheat on this examination was when they thought of themselves as banker .
What is more , it is not just that mass who identify as bankers incline to dwell and chisel more than the general universe . In fact , the bailiwick showed that this behaviour was expected of them by others . This can be seen when participant were asked how often they thought bankers would cheat on this exam ( when compared to other interest radical ) . responder tended to intend that banker would cheat more than prison con on the test . This enounce something for what expect of the masses we entrust with our money .
Profound Implications
This neat experimentation has some unfathomed implications for how bank are execute and govern . It suggests that one of the reasons why banks might be such cesspool of bad behaviour is not the actual multitude working in them – who act virtuously when they ’re not in working modal value .
So , while rejigging Libra the Balance canvas with the fines that have recently been meted out is important , it is unlikely to desex underlying ethnical topic in the banking industry . It is potential to begin to fix the trouble by identifying mass who are utmost cheaters and are likely to lie down on every occasion potential . Simple tests might weed these individuals out .
Changing the Definition of a Banker
But to address the profoundly - seated ethnical issues , it is essential to change this “ banker ” identity element . There may be some ways to do this . In the forgetful term , bank might consider absent various prompts within their asylum which encourage their employees to think about themselves as bankers .
These identity prompts might include all the appurtenance we associate with banks like their slick embodied home office down to changeless flash share prices and images of money . And the prompts that further other identity at work could be increase . For instance in some banks , employee are now asked whether they would be majestic of selling a product to a family appendage .
It is also potential to boost employee not to think about themselves as a banker . Some new retail banks further their employee not to recollect of themselves as bankers but as “ advisors ” or even “ host ” .
In the longsighted - term , however , it is necessary to change what it mean to be a banker altogether . Things like “ Greed is good ” and associations with come through at any cost might be downplayed . Other characteristic , such as being trusty and having integrity could be played up . Over time this would hopefully lead to bankers thinking about their corporate identity operator in a different way . And the result would , hopefully , be that when they are face with a situation where no one is look , they do the right affair – like the rest of the universe normally does .
This articleoriginally appearedat The Conversation and is reproduced here under a creative commons permission .
Photo : Nomad_soul via shutterstock
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