ETHICAL ISSUES IN FINANCE

Presented by Suraj Salunkhe Roll no 164 Div - C

WHY IS IT IMPORTANT TO WORRY ABOUT ETHICS IN FINANCE?

When you think about it, you realize that you put your hard-earned savings in the care of financial firms asset managers, banks, insurance, and all kinds of funds and you trust them to look after the money. You want the best return, but there is a balance between risk and reward. You need to feel confident that you can trust the finance professionals to act with integrity, in your interests.

ETHICS IN FINANCE CAN BE DEVELOPED AROUND THREE BROAD THEMES:

In financial markets In financial services industry (including banking and insurance) By financial people in organizations

FRAUDS IN THE FINANCIAL SECTOR

Legal authorities define fraud as a crime that involves the use of dishonest or deceitful conduct in order to obtain some unjust advantage over someone else. Frauds include: Financial services sector, i.e., credit card fraud, cheque fraud and other types of identity-related fraud. Insurance fraud Telecommunication-related fraud Securities-related fraud.

COMMON PRODUCT CATEGORIES

Planning products They are designed to preserve wealth or income and include life, disability and long-term-care insurance and annuities. Recommended products complement core offerings such as estate, business or financial planning. Service products These products are designed to protect clients against unanticipated losses. They include health, auto and homeowners' insurance, for example. Such product recommendations do not result from a firm's core offering. Investment products These are designed to accumulate wealth. This category is transactional-based on market trades-and as such the most removed from a firm's core services.

ROLE OF ETHICS

Code of ethics for Auditors and Accountants. Code of Ethics for Bankers. Code of ethics for Insurance Agents. Code for Conduct for CFOs. Code of conduct for brokers.