Values of financial services professionals and the global financial crisis as a crisis of ethics

Many attribute the global financial crisis (GFC) to the ethical values of the people involved, financial services professionals (FSPs) such as stockbrokers or fund managers. The crisis-of-ethics debate is important, concerning one of the main policy challenges of our times, but is based on popular lore and anecdotes rather than systematic evidence. We assess the crisis-of-ethics account of the GFC by systematically analyzing the self-enhancement and self-transcendence values of FSPs vis-à-vis the general population and testing for patterns of variation that would implicate FSPs’ values in the GFC. Employing pre-crisis data allows for an unbiased assessment. Results reveal only minor differences in values between FSPs and the general population, too small to support the crisis-of-ethics thesis by objective standards. We conclude that the financial system would not have fared better had we had a different breed of FSPs. Rather, situational forces can induce severe disregard for the welfare of others, also in people with ordinary, decent values. The implication is that fixes to the financial system can only come from improved regulatory design.