“Ethics” and “Social Responsibility” in Financial Crises as Parameters of the Financial Environment

“Ethics” and “Social Responsibility” in Financial Crises as Parameters of the Financial Environment

Alex Stefan (Bloomfield College, USA), Doru Ursutiu (University Transilvania of Brasov, Romania) and Cornel Samoila (University Transilvania of Brasov, Romania)
DOI: 10.4018/978-1-60960-094-5.ch010
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Abstract

The world financial crisis and the economic recession have introduced major ethical issues to our international banking institutions. Employees perform unethical acts primarily to maintain job security and to ensure a competitive advantage in the job market. Increased hacking has also caused damage to client confidence, resulting in a customer base decline and increased litigation. These problems are further complicated when bank steering committees decide to outsource IT and help desk departments to IBM1. The legal implications of bank hacking issues are included in the Computer Misuse Act, the Evidence Act, and different state and federal laws that define the contractual relationship between the bank and its clients. To ensure financial systems are secure, banks must vigorously apply policies and controls. Unscrupulous persons both from within and outside of investment banks seek to gain profit by employing, at best, very questionable practices. Banks must implement a business continuity plan to integrate previous records and financial statements, as well as back up transactions and provide proper receipts. This is a case study that can be used for students of Computer Security or Computer Science.
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Introduction

The communication environment of the worldwide banking network and its interactions raises many ethical questions that were not frequently posed before the present world financial crisis. Suddenly, the world has discovered that bank interactions without special rules devoted to stricter standards of behavior and regulation might significantly contribute to a dangerous financial environment.

Many times considered a guide to social interaction, ethical principles have been revealed to be far more than just abstract ideas. The present financial crisis has demonstrated that the observance of ethical principles creates a framework where interaction with others can take place in an equitable, honest and productive manner.

We know that business values, in general, tend to be driven by amoral behaviors, in great part due to competition, efficiency or simply profit, not to mention greed. For many years previous to the 2008 crisis, the world simply accepted unethical and even immoral behaviors because they led the world to believe in a false wealth, a lie which led many individuals to “lose” a significant part of their personal wealth. A short list of justifications commonly accepted by a corrupt corporate environment includes:

  • I had no choice” ….i.e. denying responsibility;

  • “No one is hurt” …..i.e. denying injury;

  • “Blaming violated parties”…i.e. denying victims;

  • “They are worse than we are”…i.e. social weighting;

  • “It was for a good cause”…i.e. appeal to higher loyalties;

  • “I have the right to be unethical because of poverty (or wealth)”…i.e. self justification.

For many years, codes of ethics were considered binding and were respected by the private sector. In fact, the Internet environment has contributed to new and different ways to recruit, mislead and coerce the public, in addition to more traditional methods. Only after the actual crisis did information technology become a prime concern for researchers seeking a connection between Internet technology and unethical behavior, which in a larger context, is deviant behavior in that it is not socially acceptable to steal to take what is not one’s own. Without a doubt, behaviors by investment banks and the stock market contributed overwhelmingly to the impoverishment of millions and hardship to countless others.

  • Computer crimes:

  • Computer crime has become an instrument for unethical actions and frauds because of unauthorized access to a data, theft, defamation, intimidation, bullying, etc.;

  • Computer technology has become a tool used to violate the law and deny the rights to information access and privacy, leading to anti-social practices like cyber bullying, sexual solicitation, information piracy, etc.

  • The interconnectedness of the Web has increased the incidence of electronic fraud, including credit and debit card theft, identity theft and the unauthorized transfer of funds, as well as legal practices such as automatic buying and selling in the stock market.

  • The Internet has contributed to a growing number of security problems related to e-mails, the theft of personal or financial information and the loss or manipulation of records.

  • The Internet has also expanded the scope of crimes involving obscenity/pornography, child solicitation for sex, violence against minorities, terrorism, etc.

  • Computer risks:

  • Aircraft control might be affected by hackers;

  • Nuclear power plant control can be compromised by insecure computer network environments;

  • Military computer networks have insecure spaces that compromise national security as hackers might steal user names and passwords, which can lead to the leaking of confidential or proprietary information;

  • The privacy and security of E-commerce can be compromise by unauthorized persons.

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