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Ethics and economic growth

CII Thinkpiece 106

Publication date:

25 March 2014

Last updated:

22 September 2017


Policy and Public Affairs

Martin Wheatley, Chief Executive of the Financial Conduct Authority, offers a salutary warning that progress towards a better culture and behaviour needs to be 'locked in' now while there is a strong public focus and attention on this.

Preventing culture from going south as profits head north

  • This is the first year that the FCA has been strongly promoting the requirement for both firms as well as the wider financial services sector to improve culture and ethical behaviour.
  • Historically, the financial services sector was strongly associated with the importance of integrity. More recently, and particularly post-economic crisis, the public perception of the sector seems to be more akin to the Wolf of Wall Street than the Quaker values of yesteryear.
  • Considerable strides are being made to rebuild public trust and improve the culture and ethics of the sector by individual firms. However, there is a danger - according to the FCA - that any future economic recovery will reassert the bad old ways, and that good culture will revert to being a second or even third order issue.
  • Martin Wheatley sets out the danger of the cycle of the "something must be done" reaction to crises and scandals. This reaction often leads to increased regulation, reinforcing the "obedience mentality" that can reinforce the problem in the first place.
  • Mr Wheatley argues for creating an improved culture now; one which will be able to resist future economic pressures and future short-termism. He argues that, along with structural changes in the sector, the promotion of strong ethics in firms is a non-zero-sum game. It will benefit not only the firm itself, but the wider reputation of the sector.
  • It is impossible to avoid all future crises, but it is in all of our interests to choose long-term sustainable growth over short-term "enchanted wealth".

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Related articles

CII Ethics Paper no.3: Ethical culture: securing an ethical culture in a regulated environment (Nov 2013)

CII Ethics Paper no.2: Ethical culture: a practical guide for small firms (Sep 2013) 

CII Ethics Paper no.1: Ethical culture: building a culture of integrity (Sep 2013)

CII Thinkpiece 100: Product intervention in financial regulation: keeping the customer's interests at heart, by Chris Woolard (Sep 2013)

CII Thinkpiece 98: Can a leopard change its spots? 'Repurposing' UK conduct regulation, by Richard Hobbs (Jun 2013)

This document is believed to be accurate but is not intended as a basis of knowledge upon which advice can be given. Neither the author (personal or corporate), the CII group, local institute or Society, or any of the officers or employees of those organisations accept any responsibility for any loss occasioned to any person acting or refraining from action as a result of the data or opinions included in this material. Opinions expressed are those of the author or authors and not necessarily those of the CII group, local institutes, or Societies.


  • Mr Gerard Anthony Probett
  • 04 April 2014 10:43AM

very interesting and thoughtprovoking