Crash Interventions: Shanghai Stock Market Case

July 18th, 2017 by Kara in Case Studies

By Harley Comrie On the 2nd of July 2015 in the middle of a crowded Shanghai shopping mall a woman jumped to her death. Her public suicide was reported by bloggers as a human consequence of the Shanghai stock market crash three weeks earlier. Photos of her fate were circulated through WeChat, a popular Chinese social media app. Days earlier in Shenyang another suicide had occurred under similar circumstances. Foreign media reported it too was motivated by the stock market crash. The Chinese Communist Party (CCP) response to the Shanghai stock market ...

Case Study: Banca Monte dei Paschi di Siena

June 29th, 2017 by Kara in Case Studies

  By: Nicola Bilotta Between the beautiful hills of Tuscany stands Siena. Siena is a magical medieval city, which attracts tourists for its history and its monuments. But Siena hides many secrets. The destiny of the city has always been bound to Banca Monte dei Paschi di Siena (MPS) which is currently facing a significant crisis and is close to bankruptcy. The future of MPS is unclear, and plans for private recapitalization have failed. In December 2016, the Italian government approved a public fund of 20 billion euros to infuse capital inside ...

Case Study: Iceland’s Banking Crisis

June 13th, 2017 by Kara in Case Studies

By: Anh Nguyen Introduction Iceland’s financial collapse in 2008 was the biggest any country had ever suffered relative to its size. At the time of the crisis, total assets of its three largest banks were 10 times the nation’s GDP and 20 times the state budget (“How did Iceland clean up its banks?”). The underlying causes of the downfall lie in reckless behaviors, lack of transparency and greed. However, unlike the US, by February 2016, Iceland had sentenced 29 bankers to prison for their role in the crash. The Players Glitnir Bank The third largest ...

Impact Investments: Good Profits?

May 26th, 2017 by Kara in Case Studies

By: Genevieve Crawford Investors with high ethical standards can be constrained by the corporation’s duty to maximize shareholder profit. Pure nonprofits may disappoint with their low returns. A new way of doing good and making money is called impact investing. Impact investments provides funding opportunities for both social and financial returns. The main advantage of impact investments is its ability to capitalize on governments’ and charities’ lack of monetary resources. As a financial method, it has tremendous potential to solve pressing world issues. Impact investing is already delivering positive outcomes in sustainable development ...

When Businessmen Rule the State

May 11th, 2017 by Kara in Case Studies, Essays

  By: Kara Tan Bhala Striking parallels between two billionaire businessmen heads of state, now exiled Thaksin Shinawatra and Donald Trump. Part 3 of SPI’s Trump Financial Ethics Watch Series “If you monitor what Donald Trump is saying, he’s bluffing, the man. That’s really the culture of a businessman.” While there is “some similarity” between Thaksin Shinawatra, Financial Times Thaksin Shinawatra: Billionaire Businessman Turned Politician Thaksin Shinawatra was elected as prime minister of Thailand in 2001. He was a businessman billionaire who made his vast fortune in telecoms. Espousing populist views, he cynically seized political advantage ...

Case Study: Deutsche Bank Money Laundering Scheme

April 27th, 2017 by Kara in Case Studies

By: Michelle Chan The Deutsche Bank Money Laundering Scandal After Russia’s incursion into Crimea, sanctions by the European Union and the U.S. against Russia forced President Putin to declare “offshorization” illegal in an attempt to keep Russian businesses at home and prevent the declining exchange rate of the ruble from damaging the Russian economy. As a result, Russian billionaires resorted to a more discreet way of funneling money offshore via mirror trading whereby a relatively small amount is traded in each transaction. Thus, creating the Deutsche Bank money laundering scandal. This ...

Moral Cents: Winter/Spring 2017 Issue

April 13th, 2017 by Kara in Journal

Dr. Kara Tan Bhala This issue of Moral Cents: Winter/Spring 2017 presents just two articles with the first being a large and comprehensive report evaluating the LIBOR manipulation five years after the discovery of this dismal practice. Regulators began investigating the manipulation of LIBOR by a colluding clutch of international banks in 2012, after the Financial Times published an article by a former trader recounting how LIBOR manipulation was common since at least 1991. Rishi Hardowar writes a thorough report on the scandal, examining its causes, the investigations, the resulting plethora of ...

Ethics Analysis: The Panama Papers

March 30th, 2017 by Kara in Case Studies

By: Anh Le Introduction John Doe sent the documents he gathered from Mossack Fonseca (MF), a Panamanian law firm to the German newspaper Süddeutsche Zeitung stating that massive, pervasive corruption from high net worth individuals and criminals represented the erosion of ethics around the world. John Doe believed the documents had to be made public for everyone to understand the sources of income inequality. This report provides an overview of MF, how its documents were leaked to the world, and the global reactions. Specifically, this report addresses the cases documented in ...

Wells Fargo Fake Accounts Scandal

March 15th, 2017 by Kara in Case Studies

By: Harley Comrie Republicans in Congress and Donald Trump want to roll back Dodd-Frank regulations to help banks become more profitable, and remove ‘burdensome’ regulations. These politicians apparently forget that so-called ‘light touch regulation’ was a reason for the Great Financial Crisis (GFC) of 2008, the effects of which haunt us still and carried President Trump to power. It is helpful to remember even after the GFC, bank scandals recur with dismal regularity and that regulations form the thin red line protecting consumers from the greed of financial institutions. The following is ...

Ethics Analysis: Foreign Bribery

March 2nd, 2017 by Kara in Case Studies

By: Rachel Thomas Part 2 in SPI’s Trump Financial Ethics Watch Series Trump’s Repeal of Disclosure of Payments Rule for Oil and Mining Companies On February 14, President Trump signed his first piece of legislation, H.J. Resolution 41, repealing an anti-corruption measure that required oil and mining companies to disclose their payments to foreign governments. The resolution repeals a Securities and Exchange Commission (SEC) rule written under the 2010 Dodd-Frank financial reform law. The purpose of the SEC rule was to safeguard against corruption in resource-rich countries by mandating companies on US stock exchanges ...