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Swearing to be Virtuous: The Prospects of a Banker's Oath

2013; Routledge; Volume: 71; Issue: 2 Linguagem: Inglês

10.1080/00346764.2013.800305

1470-1162

John R. Boatright,

Hate Speech and Cyberbullying Detection

Abstract In an effort to restore trust in the banking sector, the Advisory Committee on the Future of Banks in the Netherlands made a recommendation, which has since been adopted, that bank executives be required to swear an oath akin to the physician's Hippocratic Oath. This examination of the prospects of the Dutch banker's oath addresses two broad issues. One issue is the efficacy of oaths themselves as instruments for achieving the desired end. A second issue concerns the extent to which this particular oath is a useful guide to ethical banking practice. One conclusion of this study is that it would be difficult for any oath in banking to serve a role that is analogous to the Hippocratic Oath in medicine because of the many dissimilarities involved, most notably the lack in banking of a singular focus on service. Second, the Dutch oath, while admirable in its lofty exhortations, fails to provide a reliable guide through the many difficult judgments that must be made in banking. Keywords: banker's oathbankingbanking ethics confidentialityfinancefinance ethicsHippocratic Oathmodelsoathsrisk management Notes 1 Samuel Butler, Hudibras, Part 2, line 107. 2 See http://www.financialhippocraticoath.org/ 3 The passage continues:Too feeble implements to bind;And hold with deeds proportion soAs shadows to a substance do. 4 See Kant, Metaphysics of Morals, Section 40 "On Acquiring Guarantees by Oath." 5 As a vivid illustration of this point, President Barack Obama retook the oath of office after the official inauguration ceremony in 2009 because the Chief Justice of the Supreme Court, who administers the oath, bungled the wording. This retaking was deemed necessary to forestall any charges that Mr Obama had not been duly empowered to assume the office of president. 6 Strictly speaking, the sanctions in these cases result from certain proscribed conduct other than the violation of an oath per se, and the conduct would typically result in these sanctions even if an oath were not taken. Similarly, sanctions for committing perjury while under oath are not, strictly speaking, for violating the oath taken but for offering false testimony, which could be made illegal even without the taking of an oath. This assertatory oath becomes merely a means for demarcating the testimony that is subject to sanctions for perjury. Still, such an oath may be effective in deterring the behavior that would lead to sanctions, in part, by reminding a witness of the requirement for truthful testimony. 7 The marriage vow is violated by adultery and abandonment, but few other acts in a marriage so clearly constitute a violation. 8 The same distinction may be made between counterparties and principals. The former are merely market participants, who, if they are "sophisticated investors," may be assumed to know what they are doing and thus to require no care; the latter are parties who have engaged the bank to act on their behalf so that the bank becomes their agent, with a duty to act in their interest. 9 Or the other partners in cases where the bank is a private partnership. 10 Evidence of this is the derision that occurred when Lloyd Blankfein, CEO of Goldman Sachs, was quoted in the Times of London as saying that he is just a banker "doing God's work." A spokesperson for the bank later admitted that Mr Blankfein did not intend his remark to be taken seriously (Weil Citation2011). 11 The case in question concerns a security called ABACUS 2007-AC1. For details, see the complaint of the Securities and Exchange Commission, United States District Court, Southern District of New York, Securities and Exchange Commission v. Goldman Sachs & Co. and FabriceTourre, 10-CV-3229. 12 See, e.g., In Re: Checking Account Overdraft Litigation, United States District Court, Southern District of Florida, Miami Division, Case No. 1:09-MD-02036-JLK. 13 Less clear is the duty of confidentiality for information about a patient or client that has been acquired from some other source. If that source is public, then there is no duty of confidentiality, and if non-public information is acquired from some source other than the patient or client under a pledge of confidentiality, then a duty of confidentiality still exists to this other source. In other cases, it might be argued that a professional has a duty not to disclose non-public information that might harm a patient or client but that this duty results not from a duty of confidentiality but from a more general duty to act in that person's interest. 14 Observing this duty, though, may bring the accountant into conflict with a duty of candor to disclose all relevant information to a client. See, e.g., Fund of Funds, Ltd v. Arthur Andersen & Co., 545 F. Supp. 1314 (1982), in which an accounting firm was successfully sued for failing to disclose a fraud against the plaintiff by another client using information that the firm had gained from auditing that other client. 15 Available at http://www.wilmott.com/blogs/eman/index.cfm/2009/1/8/The-Financial-Modelers-Manifesto.