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"Preface" [2019] ELECD 1549; in Russo, A. Costanza; Lastra, M. Rosa; Blair, William (eds), "Research Handbook on Law and Ethics in Banking and Finance" (Edward Elgar Publishing, 2019) xv

Book Title: Research Handbook on Law and Ethics in Banking and Finance

Editor(s): Russo, A. Costanza; Lastra, M. Rosa; Blair, William

Publisher: Edward Elgar Publishing

Section Title: Preface

Number of pages: 5

Extract:

Preface


In the foreword to its March 2018 discussion paper on `Transforming Culture in Financial
Services', the Financial Conduct Authority writes that `Culture in financial services is widely
accepted as a key root cause of the major conduct failings that have occurred within the indus-
try in recent history, causing harm to both consumers and markets. For markets to work and
firms to be successful, it is critical that they are seen as trustworthy.'1
These ideas have become widely accepted in recent years, not least because of the lead
given by central banks, regulatory agencies such as the FCA, and leaders of financial insti-
tutions themselves. The challenge after the global financial crisis ­ which has heightened the
discontent that arises from income and wealth inequality ­ is how to reconnect the interests
of bankers and financiers with the interests of society. At the heart of the debate is an under-
standing that the law, in the form of financial regulation, and in the form of soft as well as hard
law, can never by itself raise standards in the industry. Furthermore, in a globalised financial
industry, where problems in one country or group of countries quickly spread to other coun-
tries, there is a need to achieve a degree of convergence to avoid opportunities for regulatory
arbitrage or a rush to the bottom in the search for profit.
The law is concerned to establish minimum obligations, a legal floor if you will. The role of
standards, culture, incentives, ethics, trust ­ ...