The Question: Why are so many financial firms morally suspect?
The Answer: Because their cultures are self-serving, arrogant, and greedy.
A creed is “a guiding principle”. All too often the creed of the financial services industry is greed, which leads to grief for many people. While the words “fiduciary responsibility” and “ethics” are loudly professed, the behavior is in many instances not congruent and is morally wrong.
In 2008, the moral bankruptcy of Wall Street and the big-name banks was exposed when a financial crisis manifested as a result of crazy risk-taking, the passing off of toxic investments to unwitting counterparties, and the earning of multi-million dollar bonuses regardless of merit. And then adding insult to injury, “we the people” were required to bail out the guilty in order to make everything bad good again.
Back in 2015, the Federal Reserve Chair, Janet Yellen, stated: “There may be pervasive shortcomings in the values of large financial firms that might undermine their safety and soundness.” And, Warren Buffet told his Berkshire Hathaway shareholders that the “Wall Street money-shufflers don’t come cheap.”
From my vantage point of over forty years of professional experience in the financial services industry, I can tell you first hand that you typically only see the tip of the financial iceberg, and there is a lot underlying greedy, self-serving activity that is not transparent to you, which is occurring everyday from top to bottom in the industry.