But are the scandals driven by the occasional bad apple – or is the entire banking culture to blame?
According to a recent study from the University of Zurich bankers are more likely to cheat than others. This conclusion was reached by lead reseacher Michel Maréchal and his co-authors who tested 128 employees at a large international bank.
At the beginning of the tests, half the participants were quizzed about their jobs and their company and then asked to think of their identity as bank employees. The other half answered questions about their hobbies.
Participants were then asked to toss a coin 10 times without anyone watching and report the outcome. The catch: they could earn money if they reported flipping more heads than tails and up to US$200 if they reported flipping all heads or all tails.
So, more money for more heads or tails – and no one watching to keep participants honest.
The results were telling – the first group (the one that was asked to think about their banking identity) reported flipping heads 58.2% of the time, which is much higher than would be expected by chance alone. The control group however only reported tossing 51.6% heads.
The team tried to replicate the results the stellar results of the first group with other groups of people but the impressive (and lucrative) coin flipping pattern was specific to those people who work as bank employees.
The conclusion the authors drew: the culture of the banking sector is to blame for the cheating because the banking culture weakens social norms and rewards fraud.
If as the authors conclude, bankers are more likely to behave dishonestly, how can we fix the problem? The research team recommends professional oath along the line of the Hippocratic oath taken by doctors among other remedies.
What measures do you think would work to boost the integrity of the banking sector?