Six Pillars
Trustworthiness promotes candidness and this virtue is the basis of all relations, whether commercial or otherwise.
WaMu agreed to be truthful to the shareholders when they invested their savings into enterprises. However, Washington Mutual could not keep this shade of the character as promised to its investors. The company had to file bankruptcy, as it could not be truthful to its stakeholders. “In June 2008 Washington Mutual Bank had assets in excess of $300 billion with over 2200 branch offices in 15 states. On September 15, 2008, the holding company received a credit agency rating downgrade creating a run on deposits of its bank, resulting in withdrawal over $16 billion in 10days period. On September 25, 2008 Washington Mutual bank was seized by office of Thrift Supervision and placed in receivership with FDIC, representing the largest bank failure in American history.”(Jerry Evans, 2009). This sequence of events is enough display of distrustfulness of Washington Mutual with its investors and other stakeholders.
Respect is next pillar of character that has not been incorporated while framing the reorganization scheme of takeover of Washington Mutual by J P Morgan Chase & Co. It has been reported by Robert Sorbo (2010, May 24) that a group of senior bondholders of Washington Mutual Inc opposed the group settlement reached with Federal Deposit Insurance Corporation over the thrift’s September 2008 failure. There appears to be partiality in repayment to bond holders. As per the representative of senior bondholders, “it was unfair that note holders of holding company would be paid in full, while senior note holders at the bank unit level would not receive anything close to full payment.” This reflects that...
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...o happen; but during the course, the equity capital and non-deposit loan funds vanished from the kitty of the bank. Ethical evaluation of the takeover has revealed that there were no other alternative before FDIC except to recommend takeover of the bank. The decision, judged from the point of view of framework of ethical decision-making, was the right course of action as the responsibilities of bank failure lie with unscrupulous and unethical business practices that remained unchecked for a long time. The bank should have acted professionally and checked unscrupulous and fraudulent banking activities; but that never happened. These findings are the results of critical assessment of the takeover decision in the light of basic principles called six pillars of a character. The takeover decision was the only way out even though it harmed many stakeholders.
One year ago, on September 8, 2016 the Consumer Financial Protection Bureau(CFPB), the Los Angeles City Attorney and the Office of the Comptroller of the Currency (OCC) fined Wells Fargo Bank $185 million, alleging that more than 2 million bank accounts or credit cards were opened or applied for without customers' knowledge or permission between May 2011 and July 2015. This essay will discuss the Wells Fargo scandal by explaining how the event happened and describing how the organization approached handling a response to the crisis. This will be seen, firstly by describing the how the scandal happened, and what were the causes, secondly by discussing the reaction of the company in front of the situation, how they dealt with the crisis and then
According to Ferrell et al., (2011) the key facts and critical issues of the Countrywide Financial Meltdown were due to several different mishaps. In this case study, I have read that this organization was established to aid consumers with the ability to make purchases without a set criteria amount of revenue at their disposal. The issues came about when the customer would begin the repayment process. They start to claim they were unaware of the interest-rate because would be prudent onto the loan; they would fault the lender for late fees, excessive fees attached to their loans, and other default issues. Although these were some significant acquisitions, the institutions were permitted to rebuttal their claims. However, “another financial
Jake Clawson Ethical Communication Assignment 2/13/2014. JPMorgan Chase, Bailouts, and Ethics “Too big to fail” is a theory that suggests some financial institutions are so large and so powerful that their failure would be disastrous to the local and global economy, and therefore must be assisted by the government when struggles arise. Supporters of this idea argue that there are some institutions that are so important that they should be the recipients of beneficial financial and economic policies from government. On the other hand, opponents express that one of the main problems that may arise is moral hazard, where a firm that receives gains from these advantageous policies will seek to profit by it, purposely taking positions that are high-risk, high-return, because they are able to leverage these risks based on their given policy. Critics see the theory as counter-productive, and that banks and financial institutions should be left to fail if their risk management is not effective.
The Dodd-Frank Wall Street Reform and Consumer Protection Act’s policies haven’t really been implemented to the extent that regulators would have liked. Although the legislation takes many steps in addressing systematic risks in the United States financial system and improving coordination among regulators, some critics believe that alternative options might have been more effective. The coming years will give us a better understanding of how well the Dodd-Frank Act addressed these concerns.
Trust is the first one of the characteristics and is very important in our profession. Without trust in our profession we could not accomplish anything. In Chapter on...
Bank of America states, “Our mission is to offer lending and investment products that; Serve low-and moderate-income individuals and families; Improve underserved low- and moderate-income communities; Create sustainable practices for the long haul” (Bank of America). In 1904, the CEO, Giannini, of Bank of Italy took some risks by issuing character loans, which was later acquired by NationsBank. This risk paid off...
More trust people experience the more willing they are to go beyond their own self-interest.
Trust is the one thing in this world that lots of people desire. Who wants to have any type of relationship without trust? It is not something that should be automatically given though, trust has to be earned. People should not automatically trust just because they know them or have been knowing them for a while.
In this paper I will identify and analyze the Wells Fargo scandal as it pertains to the breakdown of leadership and ethics. I will first identify and analyze the event and discuss the challenges and conflicts the scandal presented. Then I will evaluate the issue by explaining why the issue has interest and concern to stakeholders followed by discussing the challenges presented to individuals and/or organizations around this case. Lastly, I will recommend action steps that should be taken to those involved as well as discuss what I have learned from exploring this topic.
“Corporate executives and business owners need to realize that there can be no compromise when it comes to ethics, and there are no easy shortcuts to success. Ethics need to be carefully sown into the fabric of their companies” (Vivek Wadhwa). Therefore, if Merrill Lynch had not forgotten their ethics the lawsuits would not have been so detrimental to their brand. Charles Merrill, who was a native of Florida, embarked on a journey that would lead him on his way to New York; he had the precognition to separate much of his holdings before the 1929 crash. Similar consideration would have served the firm well during the era of collateral securities in the early 2000s. So on January 6, 1914, Charles Merrill launched his brokerage firm as a one-man
of trust can begin to shape. “We have to recognize that there cannot be relationships unless there is
Trust is a pretty big subject to expand on, but now we need to move on to the aspect I
To gain an appreciation for the significance of honesty and trust, consider what our day-to-day life would be if we couldn’t trust anyone. We purchase a bottle of a hundred folic acid tablets from our drugstore. How many of us bother to count the tablets to ensure that we in fact received a hundred? We drive into a gasoline station and the meter reads that we put ten gallons of gasoline into our fuel tank. When was the last time anyone of us bothered to verify whether in fact we received ten gallons instead of nine and a half? We paid seven dollars for a one-pound package of steak. How many of us bother to verify that it was in fa...
This paper discusses the role of ethics in corporate governance. I seek to show the application of moral and ethical principles in corporate governance. Ethics is a topic that has generated a lot of interest in the last decade especially after high profile scandals. The failures of prominent companies such as WorldCom, Enron, Merrill lynch and Martha Stewart portrays the lack of corporate ethics. The failure of such business has seen an increased pressure to incorporate ethics in corporate governance. The result of corporate scandals has been eroding investor and public confidence. The entire economic system has experienced some form of stress from loss of capital, a falling stock market and business failures.
must be always characterized with it. Honest people are easier to form a bond with which makes