Financial sector warned of ethical dangers in time of credit crunch

THE credit-crunch-induced fear of losing their jobs could tempt financial services industry professionals into cutting ethical corners, a senior City figure will warn today.

Simon Culhane, chief executive of the Securities & Investment Institute, will also caution that the pressure to take "unethical decisions" will increase in the growing tough economic times.

Speaking in both Glasgow and Edinburgh, Culhane is planning to warn that, in the credit crunch era, it is even more important that temptations to cut corners are resisted by financial services workers.

Culhane, whose organisation is represented on a number of working groups set up by the watchdog Financial Services Authority, will say that ethical business practice is particularly important when consumers of financial services are themselves under money pressures.

Culhane told The Scotsman that experience taught that it was "absolutely true" financial practitioners were more liable to unethical behaviour in times of economic pressure.

He said: "It is actually in the tougher times that the importance of integrity in our dealings in the financial sector becomes even more relevant. In the current situation there has to be an increasing temptation to take such unethical decisions."

Culhane, who has held a number of senior posts in banking, added: "In good times people might cut corners in an attempt to make some extra money.

"But in tough times like now the pressure might more be 'I better try this or I might not have a job'. The danger is it moves from gratification to survival. So we must all be much more vigilant about it."

To make his point, Culhane has organised a series of interactive workshops run by the institute, the City's leading examinations and ethics body.

They will involve real-life case studies around the theme of ethics and integrity.

Drawing on these genuine case studies, the financial sector audiences will be invited to decide their response to each situation and to provide suggested actions that could be taken in similar situations.

Culhane said one example of an ethical problem that would be put to the audiences was a true-life one of a very effective senior employee who tried to join his company's board but had lied about his credentials on his CV.

In another, participants would be challenged over what they would do if, when they were pitching for a job, they discovered the presentation pack of a key competitor.

Culhane, whose group has 2,000 members in Scotland, said he was pleased to be conducting the practical, ethical workshop north of the Border "rather than just pontificating from pulpits".

The workshops are entitled "Honesty, decency and good behaviour – are you fit to conduct business in the current financial climate?"