Questionable

Deutsche Bank

deutsche-bank

From : http://knowledge.wharton.upenn.edu/article/will-crisis-confidence-deutsche-bank-spread/

Peter Conti-Brown, Wharton professor of legal studies and business ethics, sees the bigger issue as going beyond the financial problems of Deutsche Bank. Assuming that the U.S. has a reasonable case against the firm to warrant the big fine, then “the bank shouldn’t be able to get away with this behavior just because it has grown so large as to jeopardize the financial system,” he says. “If we are willing to conclude otherwise, then we have given large financial institutions the equivalent of a get-out-of-jail free card — they now have an incentive to commit gross violations of the law.”

Conti-Brown adds that “the rush to worry about systemic risk is missing the bigger, more problematic aspect of this debate: Whether banks have incentives to commit criminal fraud with the assurance that the benefits for doing so will far outweigh the costs.”

William K. Black, a professor at the University of Missouri in Kansas City, shared the same view. “I don’t think it’s tenable to have these too big to prosecute entities [whose activities] lead to serial abuse where in essence they hold the global economy hostage,” he said on the Knowledge@Wharton show. “It’s sad that people can talk about massive fraud as a cost of doing business that they will … set aside [funds for] as opposed to stopping. It tells you the complete failure of deterrence.”

It appears that “Ethics” is an issue no matter what part of the world. (note -10.3.16 post)

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