Banking Industry Meltdown. White Collar vs Blue Collar crimes

Banking Industry Meltdown
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Moral philosophy and banking industry meltdown Moral ethics is related to philosophical ethics and can be applied in making decisions on what is right and wrong in businesses and life. The moral judgments associated with moral philosophy are more about values in comparison to business ethics which focus on group decisions and how to behave and carry out activities. According to Ferrell et al (2011), moral philosophies are guidelines through which people living together optimize mutual benefit and resolve conflicts of human interests. For businesspeople, moral philosophies are important guidelines in dealing with ethical dilemmas and formulating strategies. There are diverse moral philosophies applicable in business including: deontology, virtue ethics, teleology (egoism, utilitarianism), justice and the relativist perspective (Ferrell et al., 2011).
Teleology is the most applicable and refers to the philosophy where actions are undertaken for the final cause and desire (Ferrell et al., 2011). Egoism and utilitarianism are the two theories under teleology. Banks offered different investment platforms and loans based on the notion that the consumers would benefit. Consumers were assured that there were no negative consequences of choosing the financial instruments and options advocated by the banks. Nonetheless, the banks never prepared for the risks brought about by financial exposure to the complex financial instruments. Egotism relates to the need to advance self interest first (Ferrell et al., 2011). The major banks were interested in profits rather than improving the consumer’s net worth, and the banks were greedy to continue relying on complex financial instruments without warning consumers of the possible harmful effects to their credit worthiness in case the markets failed.
Utilitarianism is related to maximizing utility for more people, and speculative trading was touted as way to increase wealth. However, it was not handled properly as the banks engaged in irresponsible credit lending so as to improve profit growth. For instance, in Barings bank, the chief trader was involved in taking risks, and management believed that was in the best interest of the bank and that of customers (Ferrell et al., 2011). However, derivatives and other complex financial instruments are also opaque and there is a risk of abuse. Traders did not have adequate information on how leveraged the financial system was, and hence there was no clarity on whether this would maximize greatest good.
“White collar” versus “blue collar” crimes
Even though, there are victims in both white collar crime and blue collar crime, there are still differences on how they are committed. White collar crimes are related to the financial world, unlike blue collar crimes which are typically violent. The white collar crimes are mostly committed by pe...