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UK Banking System and Consumer Protection

   

Added on  2020-01-07

10 Pages2585 Words153 Views
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Enterprise and SocialResponsibility
UK Banking System and Consumer Protection_1

Table of ContentsINTRODUCTION...........................................................................................................................11.1 Main harms and benefits for different stakeholders..............................................................11.2 Proposed tightening of UK banking regulation and its effects.............................................21.3 Should the UK banks have acted ethically in their operations .............................................31.4 .Clashes of rights and its relative importance. The most important right in the situations...41.5 Two other normative theories to critically examine the current situation...........................5CONCLUSION ...............................................................................................................................6REFERENCES ...............................................................................................................................7
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INTRODUCTIONThe financial crisis began in 2008 and it was the event which initiated the crumpling ofethical standards in most of the countries. In US, the period of Great Depression started due tofailure of many banks. The banks gave high leverage, loans were also provided to people whohad low credit repayment history and lack of risk control which ultimately lead to the crisis. Thisin turn resulted in the collapse of ethical behaviour in the entire financial and banking industry.The banks were focussed on their short term gains and the entire industry, their customers andeven their employees were overlooked (Garay and Font, 2012). The Bradford and Bingley banksof UK also started having the liquidity problems because of financial crisis in US. The lenderswere sceptical after the event and they had their own concerns regarding lending to banks. Theimpact of US can be seen in UK because the Northern Rock was nationalised to solve the issue inbanking sector.TASK 11.1 Main harms and benefits for different stakeholdersThe different stakeholders that were affected by the condition are:Shareholders Debt holdersGovernmentEmployeesSocietyRelated banksClientsInvestorsThe stakeholders are those that get affected by the company's decision and they have theirinterest in the company. In this type of condition the objective of wealth maximization ofshareholders gets affected. The debt holders, employees, banks, clients and investors all facelosses if the financial crisis occurs (Arshad and et.al., 2015). The economy was going down andthe companies started firing people. The other banks also faced problems as there was no creditavailable to them after the crisis. The government came to the rescue and it took major steps inorder to get the whole situation under control. All the stakeholders and their rights werecompromised by the finance industry as they led to unethical behaviour.1
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