Examining the Global Financial Crisis from a Virtue Theory Lens

• Main Author: Racelis, Aliza D.
• Format: text
• Published: Animo Repository 2014
• Subjects: Virtue Ethics; Character; Financial Crisis; Prudential Regulation; Corporate Governance
• Online Access: https://animorepository.dlsu.edu.ph/apssr/vol14/iss2/3; https://animorepository.dlsu.edu.ph/context/apssr/article/1029/viewcontent/2_Racelis_20_28final_29.pdf
• Institution: De La Salle University

As the financial crisis of 2008-9 has continued to affect the global economy, many wonder whether the proposed solutions contribute to a more stable financial system as well as to better human behaviour. While the Financial Crisis Inquiry Commission (FCIC) Report (2011) identified the factors essential to explaining the causes of the financial crisis as having included credit and housing bubbles, nontraditional mortgages, credit ratings and securitization, financial institutions concentrated correlated risk, leverage and liquidity risk, contagion risk, shock and panic, failure in virtue has also been very patent in the crisis, foremost of them being: excessive leverage and imprudent risk-taking, failure in fiduciary duties and in stewardship, as well as greed, lack of moderation, and fraud. The lens of virtue theory is, thus, necessary to analyze and explore the financial crisis’ origins and remedies. There exist ways of measuring such virtuousness or lack thereof among managers and finance industry participants, one of them being the creation of a virtue ethics scale. This paper presents the results of a survey of 141 Philippine managers, which sought to elicit from the respondents which of the virtues listed they considered desirable traits. The major responses were: (1) Honesty and competence, (2) Kind-heartedness, (3) Self-confidence, (4) Innovativeness, (5) Ambition, and (6) Security. The study’s results can give practitioners an idea of the virtues or character traits that employees in Philippine companies expect or find desirable in their superiors. In addition, they can inform the crisis debate from a virtue theory perspective.