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Ethical Issues in the Financial System

   

Added on  2020-03-16

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Ethics and issues in finance 1Name of the student- Topic- Ethical issues in financial system University Name-
Ethical Issues in the Financial System_1

Ethics and issues in finance 2This report shows reflect the key issues and ethical problems faced by financial people inorganizations, investors in financial market and other stakeholders in financial services. With theincreasing ramification of economic change, financial system helps in exchanging of fundsbetween lenders, investors and borrowers. Ethics in financial system is related to havingcomplete disclosure in the financial trading of business. This financial system operates atnational, global and firm-specific level. Money market, credit and finance are used as media ofexchange in financial system. The ethics in financial system is related to implementing financialfunctions effectively. For instance, Australian exchange security exchange board has passed newrules and regulations to curb the insider trading (Choi and Pae, 2011). There are several ethicalissues in financial system which impacts the investor’s decisions and changes in marketcapitalization and fluctuation in business operations. Throughout the time, many companies havefaced problems of scam, insider trading problems and cheats done by ill-intentioned persons. Themain ethical problem arise when the disclosure made by listed company is not as per the listingrules and regulations and they fail to comply the listing rules and regulations. It is evaluated thatall the ups and down of the share price in market is completely dependent upon the marketinformation and company’s events. If company fails to disclose the material information then itwill be illegal and unethical as well (Johnson, 2009). This type of business practice in thefinancial system destruct the business functioning and increase the fluctuation in share price(Sorkin, 2010). These kind of problems and ethical issues in financial system arise whencompany try to manipulate their material information with a view to increase their overall profit.However, in short term these unethical business practice could help companies to increase theiroverall profit and market capitalization but it could put hard negative impact on the sustainabilityof the organization. It is evaluated that if the legal compliance and penalties (Crotty, 2009). In
Ethical Issues in the Financial System_2

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