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Capital Failure
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Capital Failure: Rebuilding Trust in Financial Services

Nicholas Morris and David Vines

Abstract

Trustworthiness in the financial services industry was eroded by deregulation and the changes to industry structure and remuneration which followed. Deregulation was based on a belief that the self-interest of individuals would produce good outcomes (Adam Smith’s ‘invisible hand’) and economists’ belief in efficient markets took this idea further by assuming that all individuals are selfish and have no regard for the interests of other people. However although Smith accepted that individuals may be self-interested, he also believed that they have other-regarding motivations, including a desire ... More

Keywords: financial services, trustworthiness, ethical culture, fiduciary duties, obligations, accountability, reform

Bibliographic Information

Print publication date: 2014 Print ISBN-13: 9780198712220
Published to Oxford Scholarship Online: October 2014 DOI:10.1093/acprof:oso/9780198712220.001.0001

Authors

Affiliations are at time of print publication.

Nicholas Morris, editor

David Vines, editor

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Contents

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Part I What Went Wrong?

1 Why Trustworthiness Is Important

Sue Jaffer, Nicholas Morris, and David Vines*

2 How Changes to the Financial Services Industry Eroded Trust

Sue Jaffer, Nicholas Morris, Edward Sawbridge, and David Vines*

5 Failures of Regulation and Governance

Sue Jaffer, Susana Knaudt, and Nicholas Morris

Part II Trustworthiness, Motivations, and Accountability

7 Regard for Others

Avner Offer*

Part III Problems with the Legal and Regulatory System

Part IV Crafting the Remedies

13 Toward a More Ethical Culture in Finance

Dan Awrey and David Kershaw*

15 A Warrant for Pain

Avner Offer

16 Restoring Trust

Sue Jaffer, Nicholas Morris, and David Vines

End Matter