Posts Tagged ‘bankers’

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Lying, cheating bankers

Posted: 22 November 2014 in Uncategorized
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Lying, cheating bankers are not born; they’re created.

That’s the conclusion of the new study by Alain CohnErnst Fehr, and Michel André Maréchal, “Business culture and dishonesty in the banking industry,” published in Science.

In other words, all of the various dishonest behaviors of bankers in recent years—from manipulating the foreign exchange market, LIBOR, and the gold market to mis-selling interest-rate swaps, mortgage backed securities, and credit-default swaps—for which some bankers have been fined but none of them jailed, can be attributed to the fact that “being a banker” made people more likely to cheat.

Their study is based on the idea that individuals have multiple social identities.

Which identity and associated norms are behaviourally relevant depends on the relative weight an individual attributes to an identity. In a given situation, behaviour is shifted towards those norms that are associated with the more salient identity. Thus, if the banking culture favours dishonest behaviours, it should be possible to trigger dishonesty in bank employees by rendering their professional identity salient.

And so they did: in a simple coin-toss game, they discovered respondents who were primed to think of themselves as “everyday people” did not lie about the results (despite the fact there was ample room to do so) while the group who were primed to think of themselves as “bankers” tended to lie significantly more.

The policy lesson the authors draw is that “banks should encourage honest behaviours by changing the norms associated with their workers’ professional identity.” An alternative lesson would be that the identity of lying, cheating bankers can be eliminated by getting rid of the banks themselves.

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An estimated 50,000 people march in London, not to protest England’s early departure from the World Cup finals but against the government coalition’s austerity measures.

The crowds heard speeches at Parliament Square from People’s Assembly supporters, including Caroline Lucas MP and journalist Owen Jones. Addressing the marchers, Jones said: “Who is really responsible for the mess this country is in? Is it the Polish fruit pickers or the Nigerian nurses? Or is it the bankers who plunged it into economic disaster – or the tax avoiders? It is selective anger.”

He added: “The Conservatives are using the crisis to push policies they have always supported. For example, the sell-off of the NHS. They have built a country in which most people who are in poverty are also in work.”