The Study On The Ethical Issues In Financial Engineering

In2008, the global financial crisis made people at a loss as it suddenly outbreak. It reminded the greedy financial traders that using unfair behavior, such as immoderation, no ethical use of financial derivatives, to obtain benefit will be revenged by the market. The root of this crisis is the absence of social ethics. The financial traders, who forget honor at sight of money, damaged the interests of the people and lost the basic moral bottom line. The outbreak of the crisis let people rethink the financial engineering field which is full of financial derivatives and transaction technical strategy. Financial engineering is generally considered as a full of mathematical model and rational analysis field without any ethics and morality. However, from the financial crisis, we see that the arch-criminal is the excessive exploitation and abuse of financial derivatives. The development of the financial derivatives and their distribution are man’s subjective behavior, so financial engineering is used by people, necessarily affected by ethical constraint. With the development of financial engineering, it puts forward a new ethical appeal in recent years. In view of the relationship between finance and ethics, about finance and ethical relation, many scholars put forward the concept of financial ethics in last few years. Therefore, when we study the financial engineering, we need to think about ethical constraint as an important factor.Through the financial engineering research, this article thinks that financial engineering as a new subject has close relation with ethical as well as economics and finance, and it should be constrained by ethics. The article’s theoretical significance is as follows. Firstly, this topic is a frontier subject in the research of related fields. The research of financial engineering and ethical relations is a cross interdisciplinary study including economics, finance, financial engineering and ethics. Right now, interdisciplinary studies are not much between finance and ethics, especially involves the research between financial engineering and ethics. This study can enrich relevant ethics and financial discipline theory knowledge system. Secondly, based on the deep analysis of financial engineering and its characteristics, this paper puts forward corresponding ethical appeal. And the author makes a analysis of financial engineering from an ethical point of view, enrich the connotation of financial engineering ethics. This paper’s practical significance is that, according to the analysis of financial engineering problem and the reasonable way, we can deepen people’s thinking about the ethical issues in financial engineering to arouse people’s attention, and consolidate the development and stability of financial system. At the same time the research makes a contribution to improving the financial efficiency. Finally this research is the demand of the times to train financial compound talents with ethics.This paper discusses the relationship and connotation between financial engineering and ethics, and expounds the importance and universality of the ethics in financial engineering application. It takes the basic financial ethics knowledge system as the framework of analysis, and focuses on the category and the core relation of ethics in financial engineering, as well as its practical application with ethical conflicts. It intensively discusses the ethical problems in financial engineering, and gives the ideas for ethics construction in financial engineering.This paper is constituted with the following five chapters. The first chapter is introduction. This part introduces the background of the topic, purpose of research, significance, the research methods and framework.The second chapter is research review of financial ethics and financial engineering ethics. As research literature of financial engineering ethics is relatively limited, but related researches about financial ethics are rather rich. So the analysis of the relevant issues can base on financial ethics theory system, because financial engineering is a special field of finance.The third chapter is the thinking of financial engineering and ethics. Under discussion of the connotation and relationship between financial engineering and ethics, this paper reveals the importance of ethics appeals in financial engineering. It puts forward the contradiction between economic benefits and ethical value in financial engineering.The fourth chapter discusses the problems of ethics in financial engineering in our country. Make a deep analysis of ethical issues from ethical situation about our country’s personnel in financial engineering and ethical conflicts in the market of financial engineering.The fifth chapter puts forward the way of China’s ethics construction in financial engineering. It also puts forward rationalization proposal in related people’s training, market supervision, and ethical regulation of financial engineering product in financial engineering and so on.In the research method, first of all is standard approach. With the framework of financial ethics knowledge system, analyze the financial engineering and ethical. Put the ethics knowledge into the financial engineering field. Secondly use the comparative analysis. Reference abroad construction method in this field, this paper puts forward reasonable construction way. Finally in some connotation problem, use the academic thought review method research, draw the writer’s view.This study has two characteristics. First, the paper’s subject is new. We put two current popular subjects, the financial engineering and ethics, together. It is a unique interdisciplinary research topic. Second, this paper for financial engineering ethics analysis perspective is new. Puts forward a more reasonable research point of view, which is from the financial engineering of person, the relevant market and financial derivatives on several levels. It gives some reference model for future generations in this area’s research analysis.