The Robert W. Purcell Professor of Finance at Cornell University and Chair of the FMC2 Scientific Advisory Board shared her fascinating insights on the intersection of finance, ethics, and law across the financial services industry, with reflections from her book, Something for Nothing: Ethics and Finance on Wall Street.
Presenting data highlighting the low levels of trust in the financial services industry, including Ireland, Professor O’Hara described the faded ethical “lines” that exist in financial settings due to the technical, complex and at times impersonal nature of banking. She presented financial services not as an ‘ethically challenged’ sector but as one where the ethical dimension is not always visible.
The themes of her presentation were discussed further by a panel, who explored the current status of the industry from an ethical and cultural perspective. Looking forward, the panel suggested that the industry should take the following steps to continue restoring trust:
Focus on the culture of finance – injecting the “should we?” question into each financial firm’s DNA.
Recognise the role played by behavioural biases.
Change the way we regulate as arbitrage thrives on specificity. There is a need to move to operating from standards and not rules.
The session also drew on the expertise of FMC2, a joint initiative between UCD, Dublin City University (DCU), NUI Maynooth and industry partners, which is an innovative multi-disciplinary collaborative research cluster that informs the future development of the international financial services sector in Ireland. The Financial Mathematics Computation Cluster (FMC2) is part of the Science Foundation Ireland (SFI) Strategic Research Cluster and brings together complementary expertise in financial mathematics, financial economics and computer science to create a multi-disciplinary research programme in asset and risk management. For more information see www.fmc-cluster.org/
Dr Kate Cullen, Programme Director at The Institute of Banking, chaired the panel discussions. Panel members included:
Marion Kelly, Acting CEO of the Irish Banking Culture Board;
Professor Cal Muckley, Chair of Operational Risk in Banking and Finance, UCD and,
Professor Michael Brennan, Professor Emeritus of Finance, UCLA and London Business School and FMC2 Scientific Advisory Board member.
Professor O’Hara’s research was informed by the Edelman global ranking of trust in industries which placed banks and financial services firms last in its 2019 survey. She also referred to a recent Harris poll which found that 68% of those surveyed disagreed with the statement “In general, people on Wall Street are as honest and moral as other people.”