Define ethical problems in bank lending with two examples. Why do banks care about ethics in...

Define ethical problems in bank lending with two examples. Why do banks care about ethics in lending?

Solutions

Expert Solution

Ethical problem in bank lending would be very significant in nature because bank should always be liable to the societal members as the bank is is responsible body to deal with the depositors money and it should organise the depositors money in such a way that their optimum interest should always be protected and hence there should be an ethical consideration while lending and protecting the interest of the depositors.

Two examples of ethical problems in lending are-

A. Manipulation of the credit ratings of borrowers in order to increase their credit worthiness

B. Issuance of the loan to the close AIDS of directors and the other important managers.

Banks should be caring about ethics in lending because banks are always acting as intermediaries between the borrowers and the depositors so they should always be trying to protect the interest of those who had deposited their money into the bank and these are mainly the societal members so they have a higher responsibility to protect the interest of depositors.

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

Define ethical problems in bank lending with two examples. Why do banks care about ethics in...

Define ethical problems in bank lending with two examples. Why do banks care about ethics in lending?

Think about depositors lending money to banks and banks lending that money to loan customers. Why...

Think about depositors lending money to banks and banks lending that money to loan customers. Why do we have financial intermediaries like banks? What is the future of banking?

What are some examples of moral hazard problems in bank lending? How do regulators act to...

What are some examples of moral hazard problems in bank lending? How do regulators act to prevent these problems?

What are some examples of moral hazard problems in bank lending? How do regulators act to...

What are some examples of moral hazard problems in bank lending? How do regulators act to prevent these problems?

Define "ethics." How do ethics and morals differ? What are some of the rules for ethical...

Define "ethics." How do ethics and morals differ? What are some of the rules for ethical decision–making?

Discuss overall ethics in business and why ethical problems occur in business

1. How does a central bank influence the lending capacity of the banks? 2. How do...

1. How does a central bank influence the lending capacity of the banks? 2. How do the fluctuations in the exchange rate influence the domestic price level? 3. What is a barter system? The drawbacks of this system are as follows: 4. Why is comparative advantage rather than absolute advantage the basis for trade? 5. Explain the concept of “lender of last resort.” What is discount rate?

What does care ethics share with Aristotelian virtue ethics? How do they differ as ethical theories?

Why do workers, firms, banks, and investors in financial markets care about the future rate of...

Why do workers, firms, banks, and investors in financial markets care about the future rate of inflation? How do they form their expectations of future inflation? Do current conditions in the economy have any effect on how they form their expectations? Briefly explain.

a) Define what are money markets? (15 marks) b) Describe the two categories of bank lending...

a) Define what are money markets? b) Describe the two categories of bank lending to corporations. c) What are the benefits and costs for a bank when it decides to increase the amount of its capital? d) “Bank managers should always seek the highest possible return on their assets”. Is this statement true, false, or uncertain? Explain your answer.

Subjects