Amorality and Banking

This is one of the last sentences in the highly controversial and disruptive book Swimming with Sharks1 (2015) by the Dutch anthropologist and investigative journalist Joris Luyendijk. If nothing else, it characterizes the current state of the public debate about the issue of morality in the global banking sector. Consensus has been reached about what exactly happened during the 2008 financial crisis and its aftermath.2 There is less agreement, however, on who should be blamed for the destructive events. According to a commonly held view among bankers, it seems as if everyone had a part to play in the build-up of the events – not just bankers but also politicians, financial regulators and even ordinary citizens. Bankers may be portrayed as scapegoats but since we all kept dancing while the music was playing3, at least some leniency is permitted. Luyendijk partly endorses this argument when he claims the stigmatization of bankers as ‘greedy bastards’ is misguided. Instead of targeting bankers as morally corrupt individuals, one should look at the system of banking as a whole. He argues the banking sector is subject to influences from an amoral system, in which bankers internalize behavior that does not include any moral considerations. In a world of zero job security, for instance, bankers tend to lose empathy for their colleagues and clients. Knowing this, it becomes clear how the sale of high-risk, complex financial products like subprime mortgages was perceived to be permissible. Yet, the existence of an amoral system is only one way of looking at the lack of morality in the banking sector. In this essay, I claim that the lack of morality can additionally be explained by way of dysfunctional conscience on an individual level. Dysfunctional conscience can roughly be defined as lacking the ability to reflect on one’s own behavior and judge whether it is morally permissible or not. A key aspect of a dysfunctional conscience is low moral self-awareness. Low moral self-awareness implies a high degree of moral disengagement, which should be perceived as a psychological mechanism that results in a person’s disengagement with his or her moral considerations. Applying this mechanism of moral disengagement to the practices described by Luyendijk (2015), I will argue that bankers are prone to exhibit poor moral self-awareness. This in turn indicates the conscience of individual bankers to be dysfunctional as moral self-awareness is indispensable to a well-functioning conscience.4 Thus, besides systemic amoral factors, the lack of morality in the banking sector can also be explained by individual dysfunctional conscience. Admittedly, both explanations interact and overlap to some degree, but it is nevertheless useful for the participants in the debate – and especially policy makers involved in the reform of the financial sector – to identify both systemic and individual causes of amorality.