Due to the absence of financial regulation and unethical activity by many financial institutions, the United States faced the financial crash of 2008 and the economy plunged into what is frequently called the Great Recession. With the collapse of the economy, trillions of dollars in investment and millions of jobs vanished, but it mostly affected the confidence of people in the 
once trusted financial institution and business people. US history witnessed the bankruptcy of Lehman Brothers, the exposure of Bernard Madoff as a fraudulent individual, the government bailout of AIG and other major bailout provisions designed to keep America financially stable.
The US Congress immediately responded and allocated $700 billion to bail out the Wall Street Institution who were responsible for the crash. Moreover, the US Treasury allotted $787 billion to the Main Street Economy in a stimulus funding, which were to be doled out over several years. Most would argue that both were necessary and, while there was an absence of business ethics, the actions needed to stabilize the economy had to happen.
Business Ethics: Did Dodd Frank Help?
A Consumer Protection Act, which is better known as the Dodd-Frank Act was passed under the Obama Administration in the hope to avoid future financial gambles and held the financial sector accountable towards their unethical ways. The question however that many ask is: Does Dodd-Frank move the needle when it comes to the application of business ethics on Wall Street?
People have begun to question Wall Street and whether it has learned from the actions that led the economy to collapse in 2008. Precisely people are more interested to know about whether financial institutions have begun to practice business ethics? A survey was conducted in collaboration between a New York based law firm and the University of Notre Dame’s Mendoza College of Business. The researchers spoke to 1200 financial service professionals spread over the UK and USA regarding their practices but, their findings related to business ethics applications were very disappointing.
Many say still that Corporate Ethics are still not widely practiced. This stems from the fact that half of the people from survey pointed out that their competitors are engaged in unethical ways to gain an edge for their business. Nearly 20% of people justified their unethical practices because they feel it is the only way to succeed.
The findings also revealed that how financial institutions put pressure on their employees to bend the rules.27% of the poll strongly believed that their industry does not care about the interests of their clients. The most disturbing finding of the research is that while, 22% of people have access to firsthand knowledge of unethical conduct taking place at their workplace; their company policies deter them to directly reporting such activities to law enforcement agencies.
It is indeed a sad affair to know that despite regulations, many financial institutions are engaging in unethical practices. Have we have failed to learn from our past mistakes? From Main Street to Wall Street, it appears that from a business ethics standpoint, we still have to go a long way to go to implement a culture of ethics in financial services industries.
References
- http://www.cbsnews.com/news/wall-street-ethics-still-an-oxymoron/
- http://www.lmghealthcare.com/news-detail/ethics-and-the-bottom-line/
- http://www.yesmagazine.org/pdf/liberateamericadownload.pdf
- http://money.usnews.com/money/blogs/on-retirement/2013/07/25/ethical-lapses-on-wall-street
- http://www.cnbc.com/id/101022751
