by Peter Norberg, Ph.D. financed by the Swedish Research Council
 
 

"Professional Ethics and Moral Behaviour in Financial Markets"
 
 
 

1, Re-enchantment Technology has contributed to what Max Weber termed the disenchantment of the world. Presently, we observe that once again allowing magic, narrative and questions about morality into what was constructed to be a rational reality is an important social trend; thus reviving an enchanted world. This could help us understand the evolution of post-modern markets.  2, The Embeddednes of Financial Markets While working in financial markets, employees aim at being rational maximizers. This competitive dimension is balanced with tendencies to co-operation. The market depends on, and is thus embedded in non-contractual elements such as morality and social capital. Custom creates the basis upon which exchange may take place and facilitates the organisation of economic activities. Trust enables us to engage in economic action. With a similar background, education, and by means of being part of one and the same culture, employees in financial institutions share a set of values and beliefs. Actors use norms and habits that reduce the complexity of their work. Resources embedded in social relations and networks are accessed for utilitarian purposes. To some extent also investors do so. Use of technology gives rise to impersonal relations in financial markets. Personal interaction is  replaced by the cold rationality of algorithms. Financial markets are disembedded while local contexts are replaced by a world-wide scope. Financial Capitalism nonetheless becomes increasingly integrated in society, as more than half the Swedish population own shares either directly or through funds. Media takes an increased interest for securities markets. The exclusivity of financial markets decreases. 3, Professional Ethics and Moral Behaviour in Financial Markets  Keywords: Professional ethics, moral behaviour, financial markets, ethical codes, ethics of virtue This investigation has three objectives. One aim is to describe professional ethics and discuss the question if responsible behaviour can evolve from within a sector of business-life. Self-regulation often means that insiders erect walls excluding outsiders, thus doing harm to the common good. Secondly, focus will be put on desirable virtues in financial markets. Is intrinsically bad behaviour likely to lead to success? Greed is fundamental to the mentality of financial markets, and plays an important role for the formation of incentives to employees in financial markets. Education in economics reproduces the belief in the justice and efficiency of the invisible hand. Financial actors justify their actions with help of this abstract rationality instead of taking much immediate moral responsibility. They tend to forget the moral foundation of their business. Thirdly, attention will be put on the question how employees understand ethical codes. That employees together train a sense for what is acceptable behaviour is consistent with theories in ethics of virtue. A virtuous character is the result of enduring practice. Popular is to take for granted that ethical codes improve communality and the esteem of a business. 4, The Global Financial Identity. Information technology facilitates the formation of a global financial identity. By means of technological development, a global financial market emerges as disembedded from local contexts. The relevance of the physical setting diminishes. 5, Regulation in Financial Markets - a Question of Culture and Morality Keywords: financial markets, responsibility, morality, regulation, culture  Western financial markets were deregulated during the 1980’s with an early start in the United States already in the late 1970’s. As regulations have been abolished, the speed with which financial capital and ensuing shock-waves transcend national borders has multiplied. Rhetorically, the market works as a restriction. In order to justify policy, financial markets are used as a given force demanding alignment. People are supposed to behave in accordance with market signals. Employees in financial markets regard themselves as serving the invisible hand. Instead of taking much immediate responsibility, financial actors justify their actions with help of this abstract rationality. There is in the working-role little feeling of responsibility for the chain of consequences that actors initiate and the common good alike. Markets can not be controlled in detail. Financial markets harbour a strong tradition and culture. Not taking account of cultural aspects while making law is likely to lead to failure. One aim of this research is to discuss self-regulation, the question if responsible behaviour can evolve from within.	Svensk version Biography Dissertation project - abridged Dissertation project - unabridged Articles Future research E-mail