Ethics in Finance

The third edition of Ethics in Finance presents an authoritative and wide-ranging examination of the major ethical issues in finance. This new edition has been expanded and thoroughly updated with extensive coverage of the recent financial crisis and the very latest developments within the financial world.

• Substantially updated new edition with nearly 40% new material, including sections on credit cards, mortgage lending, microfinance, risk management, derivatives, and securitization
• Includes coverage and references to the recent financial crisis and the very latest developments within the financial world
• Focuses on the practical issues that confront finance professionals, policy makers, and consumers of financial services
• Cites examples of the scandals that have shaken public confidence in Wall Street and world financial markets
• Includes numerous examples throughout to illustrate the concepts and issues described within the text

John R. Boatright is the Raymond C. Baumhart, S.J., Professor of Business Ethics in the Quinlan School of Business at Loyola Universi­ty Chicago, and the Director of the Baumhart Center for Social Enterprise and Responsibility. He is the author of the book Ethics and the Conduct of Business (2012) and the editor of Finance Ethics: Critical Issues in Theory and Practice (Wiley, 2010).  He has contributed chapters to many books, and has published widely in major journals. He serves on the editorial boards of Business Ethics Quarterly, Journal of Business Ethics, and Business and Society Review. 

Acknowledgments ix

Abbreviations x

1 Finance Ethics: An Overview 1

The Need for Ethics in Finance 2

The Field of Finance Ethics 13

2 Fundamentals of Finance Ethics 26

A Framework for Ethics 27

Agents, Fiduciaries, and Professionals 40

Conflict of Interest 45

3 Ethics and the Retail Customer 63

Sales Practices 64

Credit Cards 78

Mortgage Lending 96

Arbitration 108

4 Ethics in Investment 120

Mutual Funds 121

Relationship Investing 141

Socially Responsible Investing 148

Microfinance 155

5 Ethics in Financial Markets 171

Fairness in Markets 172

Insider Trading 182

Hostile Takeovers 189

Financial Engineering 201

6 Ethics in Financial Management 223

The Corporate Objective 224

Risk Management 234

Ethics of Bankruptcy 243

Corporate Governance 254

Index 273

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