ESR case study
Identify each of the stakeholders and how they are affected. What are the main harms and benefits in this case for the different stakeholders based on the current situation? Stakeholders are every person and organization directly or indirectly involved.
This study case of financial crisis has affected many stakeholders such as banks, employees and their customers. The 2008 crisis is the scariest one after the Great depression.
Lord Blocker, who showed the fledglings of the Independent banking omission, argues that In order to keep the banking sector flowing, they need to have high capital, retailing and investments for lending. There were several British companies that were affected in this crisis, for example, Northern Rock and Bradford and Bentley. They were offering up to 125% of ‘Loan to value’ mortgages and loans based on Individual’s statements.
The institutions were affected by two major problems; they were not able to make high returns on capital and there were too much high level of money deposits.
Americans banks were ahead of others during the crisis as Chinese money was invested with them. They had more open opportunities compared to others during the crisis and they had much more freedom on how to run their businesses. A lot of people who did not have concrete income benefited from this crisis as banks lend them loans despite them having a poor credit history reputation. Lots of credit cards were given out and were charged in extremely high rate of Interest so banks could earn some more money.
They had the chance to get the money and pay back monthly, which definitely benefited them. Taking a loan was easy so many businesses developed and was created. Collateralized Debt Obligations did not earn anything from this as list of bad debts kept increasing because a lot of people could not pay back what they took from the bank. This process Is known as bundling’. Alongside with bundling were assets, which did not profit them as well. The housing market was also affected badly as the estate price FIFO roof Ana people could not Nora to Duty luxury noosing.
Nearer nave European Tort banks and companies such as Northern Rock. However by 2010, recovery took place and made things under control. It strengthens a lot of banks and economies (The Financial Crisis – a Case Study). 1. From a utilitarian perspective, would you argue for or against the proposed tightening of UK banking regulation? Utilitarian is a type of view under the ethics principle. A person who agrees with this view believes that right action makes people happy.
Moreover, they argue that an action is correct if it gives maximum happiness to the greatest number of people. Reference) There is a reason why banking sector are making their regulations stricter than before. They are going through crisis and this is not only affecting the economy but lots of people. Therefore, banks are making rules that can harm people ND their banking services. It can be difficult for people. The actions are that outgoing by banking sector is not right as it is not brining happiness to the greatest number of people.
The whole crisis is not a utilitarian act. However, in a long run, it may be a utilitarian act as bank will give more opportunities and choices to people.
But during crisis, banks regulation is not a utilitarian act and does not benefit maximum number of people. Bank of England also controlled the inflation rate, which made a huge difference in the overall decisions and economy. A lot of bankers did tot get bonuses which are considered right because it is wrong for a few bankers to get their wishes yet so many people are suffering from the banking regulations (Donaldson & Kingsbury, 2013). 1.
3 Using arguments based on the ‘maxims’ of duty, would you consider the UK banks to have acted ethically in their operations?
The Banks should have acted in ethical way and not use people’s tax money to back up the crisis. According to Kant, a German philosopher, he believes that weather an action is right or wrong depends on situation and circumstances. The greater super power is not needed and human principles are enough to live happily. Kant has set the maxim theory, in order to see if it is right, the action will be needed to go through three basic tests. If the answers and outcome is valid in all of the three then the action is regarded as standard.
We need to see if the decision is short term in the case of using people. Rational actors, we cannot use people as a ladder to take ourselves into next level and hurting them. Yes, we pay people for their hard work but there should be a limit and respect to their choices and until what extend are they ready to do for money or fame (Ansell, 1904). We need to understand whether the act is immortal. Immortal act is not consistent as it destroys the main concept of human dignity. Overall, we need to check if our act is acceptable to all human beings and not Just use them for our desire.
Everyone needs to be treated the way they want to be treated. I-J banks have acted ethical to certain extend. We need to understand that the banks needed to survive and they will need to act accordingly. However, in the years to come, they went a period of structural reform by making tighter regulations. On the brighter side, will be help them be the center of the banking world.
A universal law must be followed in order to keep every in track (Crane Matter, 2 1. 4 What clashes of rights are involved in this situation? Is it possible to Judge their relative importance?
Whose rights matter most in this situation? The three main basic rights that are relevant to all human beings are for freedom to what they want, right to life and their property. Basically it is natural right. These are rights that they will have no matter what; nobody can take it away from them. This right is equally given to all the stakeholders. Human right which was taken seriously since 1948 have bought a lot of chance since then, definitely for the better of people.
They consist of liberty, Justice education, freedom to believe and speech etc (Crane , 2010).
Ethical rights are a fundamental right for every human being. A lot of different people will have to exchange ideas and religious legacy in order to understand each other. A lot of things may be disagreed but having a universal idea will help everyone get to their places. The most important invaluable right would be life, liberty and then happiness. In order to have freedom of choice, we need to live and we have both, then we will have the chance to stay happy.
Freedom is about avian a choice, which every stakeholder had. They have the freedom to do what they prefer.
Normal publics right matter the most in this situation. Everyone is living and thriving, everyone’s money is in motion and everybody is paying tax. The decision that is made must go through and understand the human rights before taking action. However, we need to also understand that rights are privileges.
These are build by us people, we need to utilize it and there is no concrete way to Judge whether who is right or not (Crane &Matten, 2010). 1. 5 Select and apply two other normative theories to critically examine the current
Consequentiality is another form of normative theory, which conducts on whether it is right or wrong depending on its outcome or consequences. It basically means the act is considered good or not depending on how it will end. So if the target is right then any method to achieve is it is also right.
This breaks down to welfare. This kind of moral usually impacts on welfare especially of the economic and political sector. Many people in the situation of crisis thought in this method in order to get everything back to control. Their target is to overcome crisis and that act is right according to consequentiality.