Ethics in Financial Markets - Essay Example

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Ethics in Financial Markets

Futures have a tendency to goad traders to borrow money so as to purchase the commodity making the deal to go sour should the price of the commodity dip, hence has a major impact on the  stocks and the overall economy as a whole. Another form of the financial market is the Hedge fund.  Hedge funds have over the years become popular due to the high returns it offers to the high end investor.  Hedge funds do invest heavily in the futures and some analysts have argued that they help check the volatility of the stock market and in extension the US economy. Hedge funds though are being blamed for the 2009 recession. Financial markets therefore do involve the financial institutions that are the banks, insurance companies, stock brokers and other closely related institutions. Ethics is perceived as a set of societal standards of conduct and moral judgment that encompasses the norms of a given community. Ethics are a personal set of values used by an individual, a group or a profession;   so as to guide them in their action and help them fulfill or carry out their obligation. Its subjective rather that objective and its relative to our perception of reality  dependent on circumstances and life  experiences of the individual or group, thus making it a continuously evolving  code of conduct. It addresses issues pertaining to morality, i.e. good and bad; right or wrong etc.  Capitalism has been accused to be Darwinian in nature due to the market volatility that is brought by competition and the natural forces of demand and supply.  ...Show more


In the paper “Ethics In Financial Markets” the author analyzes the theory of rational maximization that stipulates that one has an inner desire to gain as much as it can for himself as it can get. This theory has always been applied in the financial markets with disastrous effect.

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