Ethical Banks: An Alternative In The Financial Crisis

Date Added: Aug 2009
Format: PDF

This paper studies the differences between traditional financial intermediaries (commercial banks, saving banks and credit cooperatives) and ethical banks that focus on positive social and ethical values. The credit crisis calls into question the functionality and good performance of traditional banks. The full incorporation of ethical values and principles by traditional financial intermediaries might be a form to solve their misleading financial situation. The authors have analyzed four factors that theoretically mean ethical differences: information transparency, placement of assets, guarantees and participation. These four factors are grouped in an index called Radical Affinity Index (RAI).