The European Union Wednesday fined six major financial institutions $2.3 billion for colluding to manipulate key benchmark interest rates LIBOR and EURIBOR. It's the EU's largest penalty ever in a cartel case. The banks facing the penalties include Deutsche Bank (DB), Societe Generale (GLE.PA), Royal Bank of Scotland (RBS) and JPMorgan Chase (JPM).
Before you think of this matter as crisis-era stuff, consider this: 53% of financial industry executives say strictly adhering to ethical codes would make career progression difficult according to a recent report from the Economist Intelligence Unit.
In a Guardian column, former Citigroup (C) forex trader Chris Arnade details why Wall Street has a hard time being ethical. It's his view from working on Wall Street for 20 years (he left in 2012 to pursue writing and photography).
In his article and the accompanying video interview, Arnade describes a culture in which the rules were flouted and those doing the flouting were rewarded with better pay and lauded as "risk takers." He says he imagines the people named in the LIBOR and other scandals are probably genuinely confused as to why they are being singled out.
"They were just doing what they had been trained to do: bending the rules, pushing as far as they did to beat competitors," he says. In the video, he also talks about his personal contribution to the corruption he describes.
But has it gotten better since the financial crisis?
"No," says Arnade. "What surprised me and ulitmately drove me off of Wall Street [was] I expected after the financial crisis, we would all sort of look at each other and say 'this philosophy of unregulated free markets, it didn't work'...I had expected many people on Wall Street would say 'hey, let's rethink what we're doing,' and actually the opposite happened."
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