Banking Industry Meltdown

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BANKING INDUSTRY MELTDOWN 2 Banking Industry Meltdown: The Ethical and Financial Risk of Derivatives Determine which moral philosophy (as discussed in Chapter 6) is most applicable to an understanding of the banking industry meltdown. Explain your rationale. According to the chapter reading, moral philosophy is specific principles or rule that people use to determine what is right or wrong ( Ferrell, Fraedrich, & Ferrell, 2011). The moral philosophy that was discussed in Chapter 6 includes: teleology, egoism, utilitarianism, deontology, relativist, virtue ethics, justice. The moral philosophy that was most applicable to an understanding of the banking industry meltdown would be the egoism. When banks introduce the consumers to different avenues in offering different investments and various loans or savings, most often banks are confident that their particular offerings are “winners” for the consumers. They typically assure you that its’ a guaranteed investment and there are no negative consequences in the number of investments that are offered. Of course the banks could not have predicted there would have been a global recession in 2008-2009, but the banks most often never prepared for the “what ifs’. Egoism is defined as what is right or acceptable actions as those that maximize a particular person’s self-interest as defined by the individual ( Ferrell, Fraedrich, & Ferrell, 2011). Many banks are interested in not so much of the reward for the consumers, but how much rewarding it would be for the bank, the more they get their customers or consumers to make an investment the better the payoff is for them. Egoism involves self- interest and because of the greed and self interest of many of the banks it led to the result of many banks being unsuccessful. Analyze the case study and discern

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