Proposition for Introduction of a Course Titled Principles of Ethics in Finance

Proposition for Introduction of a Course Titled ‘Principles of Ethics

in Finance’

Introduction

The global financial crisis of 2007-2008 has cast a harsh light on the excesses of financial industry and unethical practices of this industry to gain highest benefits to generate profits for banks and financial institutions. Different schools of economic thought (neo -classical, Marxist, Keynesian, regulationists, etc.) have attempt to interpret this crisis and each one of them agrees that lack of concern for ethics is the core reason behind the economic crisis which took the global at vast scales. These economists interpret this crisis in terms of ethical deficit and advocate for financial regulation by ethics for next generation financial industry.

Currently business schools have not made ethics a mandatory part of financial education which may account for the lack of ethical conduct and ethical concerns for a majority of managers in finance industry. Similarly, George Mason University does not have specific courses to inculcate ethical behavior and thinking into finance majors. The paper discusses the implications of the lack of ethical education at the university for finance majors and makes the case for introducing a compulsory course "Principles of Ethics in Finance" within university curriculum.  

Discussion

The importance of ethical awareness for business graduates can be identified by Katz (2011) who mentions that without a high degree of ethical awareness, a manager or an employee at a financial instruction runs the risk of subordination of ethics to the logic of capitalist finance. He then proposes a third track of financial regulation by ethics that gives primacy to non-financial criteria.

The need for inculcation of ethical awareness has never been so important within education of finance as today. The Global Financial Crisis of 2007 has upset the standards of finance, which had the effect of creating need for a new awareness within finance that of ethics and morality. Many renowned business and engineering schools already attempt to integrate these two elements into their educational programs through workshops, seminars and courses on subjects of morality and ethics (Aaragon, 2013). This sets a standard for GMU to integrate the same in its curriculum. The usefulness of inclusion of this element in finance education is also high since its enables students to be in tune with the new codes of finance in the emerging economic environment (Katz, 2011).

The need for a new financial system is "Principles of Ethics in Finance" is all the more urgent since there are emerging values ​​and principles for the finance industry to regulate the behavior of fund managers and rating agencies (Aaragon, 2013). In addition, the capitalistic society has left little room for humanistic values in the finance industry. Lack of ethical awareness is not felt during education years of finance graduates; however, it must be realized that these professionals will be faced with a different reality once the school is completed, where the priority of each company is to make money at all costs (Prodhan, 2004). If this awareness is not inculcated during school years, then there is little room for inculcation of these values during professional lives.