Dr. Rene Schmidpeter
René Schmidpeter holds the Dr. Juergen Meyer Endowed Chair of International Business Ethics and CSR at the Cologne Business School. For more than 15 years he has worked and done research in the field of sustainability and corporate social responsibility. He is Section Editor of the CSR Encyclopedia and Series Editor of CSR, Sustainability, Ethics and Governance with Springer.
First the good news : Banks have an important role in society. They are largely responsible for the efficient allocation of capital for entrepreneurial and business ideas. They make one for all of us beneficial deadlines and risk transformation and provide efficient price formation in financial markets. Also the investment business and the speculation – as long as they happen to own resources and at their own risk – meet socially important tasks: keeping markets liquid , supported the assessment of future developments and help other market participants to hedge their own risks inexpensive. So far so good ! But what if the banks bet on the credit default by its own customers ? If are at once from risky credit transactions , by inscrutable product transformations best investment opportunities with AAA rating ? If your own investment risks are passed on to customers ? By then, transactions are made at the expense of third parties , usually at the expense of the general public , the taxpayer or the customers. Here the boundary of a sustainable corporate management is exceeded and the business model is not viable in the long term .
This would be no problem if the actors involved is not ” too big to fail ” would be , ie must be thus saved from politics and from general tax payers and savers . At least then we will not find ourselves on efficient markets , but moving towards financial socialism. The same applies if any entrepreneurial freedom is made in the financial sector through government regulation to niece. Both discussions “too big to fail” as a show “absolute regulation,” as a negative example that we will not be able to avoid market economy structured finance markets. For that we need transparent business models that generate fair to all stakeholders , and ultimately a win-win for the bank or investment company as well as the society. But responsible citizens and economic expertise , the negative developments addressed in time to the public.