The Professional Morality of Bankers: Milieu-Formation and Codes of Professional Ethics in Global Finance

The project “The Professional Morality of Bankers: Milieu-Formation and Codes of Professional Ethics in Global Finance” examined whether and how group processes and milieu-formation occur among professional actors in the international financial sector, where the processes in question could provide the social basis for the emergence of a professional morality and a form of “critical professionalism” in the finance industry.
The financial and banking crisis revealed not just the economic but also the profound social consequences of economic action in the financial sector. This prompted us to ask in particular to what extent and under what conditions financial actors (can) relate to the social dimension of their economic activity and also take into account the negative external effects of their business practices.
However, hardly any other occupational group has been the focus of less social scientific examination than the banking and financial professions. A further goal of our research, therefore, was to fill some of the resulting gaps in our knowledge and, if necessary, to correct common stereotypical assumptions concerning bankers.
To this end, the project drew upon the central insight from the theory of practice that, even in the economic system, actors are not exclusively interested in maximizing their own utility, but are also concerned with legitimacy and recognition. The sociologically relevant question is therefore not whether morality plays some role on the financial markets, but what financial actors understand by morality and social responsibility and what importance they attach to it in their working lives.
With reference to Émile Durkheim’s theory of the normative integration of functionally differentiated societies, our research findings were able to confirm that professional milieus and their codes of ethics play a central role in generating “solidarity” and in “curbing individual egoism” in modern social orders.
The research was based on comparative ethnographic milieu studies on professional groups in the finance industry at the Frankfurt and Zurich banking centers. Starting from the question of how bankers understand their own professional activity, we examined their “internal social milieus” (Durkheim) as reflected in their practices and symbols and in their worldviews and their communal patterns. Moreover, we studied the institutional processes that provide evidence of an ethical renewal in the financial sector, as documented, for example, by the founding of “ethical banks” or by critical debates within professional organizations in the finance industry.
The analysis of the interviews brought a dilemma to light: Although financial actors do indeed associate normative claims with their profession, these claims do not affect the social sphere that is especially in need of normatively guided action. The “professional morality of bankers” represents in the first instance an “internal morality” addressed to customers, employees or colleagues, while society plays only a negligible role as a normative point of reference.
At any rate, the homogenous composition of the social milieus from which managers in the financial sector are increasingly recruited is closely related to this inward-looking professional morality. The social disembedding of economic action in the financial sector is therefore not only a function of a systemic logic that elevates the orientations to profit and competition to its central principles, but also of the homogeneous milieus of financial actors who have lost touch to a large extent with other lifeworlds.
That other normative orientations are also possible within the financial system is shown by the analysis of ethical credit institutions whose everyday practices are not based exclusively on principles of economic profit maximization but are also highly compatible with social discourses on sustainability. In particular, criticism of conventional banking and its internal morality, it transpired, is a constitutive and recognized component of the professional biography of ethical bankers.

The most important publications of this project:

Lenz, Sarah: “Normativer Wandel im Bankenwesen? Eine Analyse kritischer Distanzierung `ethischer Banker´“, in: K. Backhaus /D. Roth-Isigkeit (eds.): Praktiken der Kritik. Frankfurt am Main: Campus, 2016.

Czingon, Claudia: “’Wirtschaftsethik‘, ‘Corporate Social Responsibility‘ und ‘Selbstreflexion‘: Selbstkritik im BWL-Curriculum deutscher Business Schools?“, in: K. Backhaus/D. Roth-Isigkeit (eds.): Praktiken der Kritik, Frankfurt am Main: Campus, 2016.

Czingon, Claudia and Sighard Neckel: “Banking in gesellschaftlicher Verantwortung? Zur Berufsmoral im Finanzwesen“, in: WestEnd. Neue Zeitschrift für Sozialforschung, 01/2015, pp. 71–84.

Herzog, Lisa/Sarah Lenz/Edgar Hirschmann: “Ethische Banken in Deutschland – Nische oder Avantgarde? Eine Analyse der Selbstdarstellungen alternativer Geldhäuser“, Institut für Sozialforschung Working Papers 7, Frankfurt am Main, 2015, [online] http://www.ifs.uni-frankfurt.de/wp-content/uploads/IfS-WP-7-Herzog-Lenz-Hirschmann.pdf [05.10.2017].

Lenz, Sarah/Lisa Herzog/Edgar Hirschmann: "‘Ethische Banken‘ – Nische oder Avantgarde?“, In: WestEnd. Neue Zeitschrift für Sozialforschung, 01/2015, pp. 85–95.

 
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