The Ethics of Banking On the Ethical Economy of the Credit and Capital Market, of Speculation and Insider Trading in the German Experience

  • Peter Koslowski
Part of the Studies in Economic Ethics and Philosophy book series (SEEP)

Abstract

A developed money, credit and capital market which provides the economy with the financial resources necessary for economic transactions and growth is a generally acclaimed hallmark of economic development. Banks play a vital role as the intermediary institutions in the money, credit and capital market. They mediate the money supply in the money market between the central bank and the economy. They mediate credit between the demand for credit and the supply of savings, and they finally function as mediator between industry’s demand for capital and secured loans and the supply of capital from industry, financial immediaries and private individuals. Banks are therefore the intermediators par excellence. In a system of universal banking as the German banking system, banks are, however, not only intermediaries for investment but also judges of investors and of alternative investment uses of capital as well as of the creditworthiness of their customers in the credit market. They are not only mediating, but constantly evaluating risks and creditworthiness. Banks furthermore act as investors for their own account in the stock exchange and give advice to institutional and private investors for their investment in the capital market. Their roles as evaluators and judges in the credit market and as investors and consultants to other investors in the capital market cause that they are influential factors in the economic process far beyond their function as mediators between savings and investments.

Keywords

Depression Europe Transportation Income Assure 

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  • Peter Koslowski

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