Question

Much has been written lately about the ethics and responsibilities of our financial intermediaries. Discuss the impact that ethics play in our financial markets. Who is held responsible? What standards are applied? How does it impact business borrowing?

Answer 1

Ans. Basically every field has their own code of conduct and code of ethics which help that professional in that particular field to dischare his/her duties honestly.And when it comes to finance the role of ethics is even more important because in finance there are many roles such as a mutual fund manager where you have a fiduciary duty towards your clients or investors to act in their interest even before your own or your firm's interest.

And basically when someone is advicing someone or takin action on behalf of someone then that professional is held responsible for the overall healt of the funds or his/er investment decision on behalf of his/her investors.

So the basic standards which are applied are priority of transaction in which you transact for your client first een before you do your own transaction.Second is doing proper due diligence of you client's investment history and knowlwdge so that you can make a well versed IPS(investment policy statement).Also you should disclose any conflict of interest if any.

And in my opinion the business borrowing is a deal beweeen a two party in which one party agrees to pay an interest for the principal borrowed and it should make timely payment of those interset and principal payments.