Economic Crisis – Ethics and the World Of Finance

Economic Crisis – Ethics and the World Of Finance

Meet on ethics and finance from today
Express News Service
First Published : 28 Aug 2009 03:39:00 AM IST
Last Updated : 28 Aug 2009 02:38:05 PM IST

ANANTAPUR: A two-day high profile conference on Ethics and the World of Finance will be held at Sri Sathya Sai University in Puttaparthi on August 28 and 29. For the conference, the university has brought together the top echelons of the world of finance and a number of reputed economists.

The conference will be inaugurated by Bhagavan Sri Sathya Sai Baba Friday morning at the university auditorium.

RBI Governor Duvvuri Subba Rao will deliver the keynote address.

Former RBI governor YV Reddy has also been invited to deliver a lecture.

Chairmen and chief executives of nearly 25 commercial banks, insurance companies and several regulatory bodies will participate in the conference.

The deliberations will be interactive as panel discussions. The plenary session at the end of the conference will outline a roadmap for financial institutions, regulatory authorities and other investment institutions to follow so as to ensure sustainable and stable economic growth of the country.

Four themes which are on the agenda include, the quintessence of the human values relevant to the world of finance, functioning of the financial institutions and the new complexities which have arisen in the present world of globalisation, role of the government and regulatory agencies and the need for a value oriented educational process, which produces business leaders with appropriate value orientation for tomorrow’s world.

The organisers of the conference believe that a good part of the problem is due to declining moral standards in all spheres of economic and social life.

The most appropriate place for holding such a conference is indeed Sri Sathya Sai University, which lays primary emphasis on inculcation of human values without compromising on excellence in academic pursuit. The university has, over a short period of its existence, become a role model for other varsities by effectively integrating the two objectives of education, inculcation of values and enhancement of capabilities.

The unique educational experiment started by Sri Sathya Sai Baba as part of His Divine Mission has indeed proved to be a great success, according to Viswanath Pandit, Vice-Chancellor of Sri Sathya Sai University.

Express Buzz Reference

Global crisis led to breakdown of trust in fin system: RBI
Press Trust of India / Puttaparthi /ap August 28, 2009, 17:39 IST

Reserve Bank Governor D Subbarao today said the ongoing global crisis has resulted in a massive breakdown of trust in the financial system and that the study of economics could lose its value base.

“What the crisis has done is to cause a massive breakdown of trust: trust in the financial system, in bankers, in business, business leaders, investment advisers, credit rating agencies, politicians, media and in globalisation,” he said at a conference on ‘Ethics and the World of Finance’ here.

Saying that current financial crisis has called into question the ethical foundation of the financial world, the Governor at Sri Sathya Sai University said the crisis has exposed an issue of moral hazard in the banking system.

“…Something that has come to be called privatisation of profit and socialisation of costs,” he said.

The governments can hardly afford to have large institutions fail as they would be bailed out at tax payers expense, he added.

The ‘too big to fail’ syndrome enables financial institutions to take risks a soap maker cannot take, he said.

The crisis, he said, has triggered a soul searching debate on whether the malaise in the financial sector could be a result of the flaws in the direction that economics, as an academic discipline, has taken over the years.

“I have raised the issue of economics, as an academic discipline, losing its value base, and conjectured if that could be at the root of the malaise in the financial sector,” he said. Subbarao said the ethical content of economics got eroded over the centuries as economics tried to move from being a value based social science to a value free exact science.

“The mathematical abstractions got carried too far and in the process economics lost its link with real life situations that it was expected to study and analyse,” he said.

Though there is no evidence to show that people in the financial sector are inherently less ethical, given the larger temptation and more opportunities there could be greater incidence of unethical behaviour in the sector, he said.

“Banks and financial institutions have a greater responsibility of being conscious of the obligation they have of not jeopardizing the larger public interest,” he said.

Further, quoting economist John Stuart Mill, he said that “if we make men honest, good and decent, then they will make themselves honest, good and decent engineers, doctors and teachers, and may I add, financial sector professionals.”

Business Standard Reference

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