Investment Bankers Moral Hazard Analysis And Prevention

The U.S. subprime mortgage crisis and triggered the global financial crisis is notonly an economic crisis, but also ethical and moral crisis. The reason of Produce isthe source of the ethical and moral crisis can be continuously to develop financialderivatives investment banking professionals. Therefore, analyze the moral hazard ofthe investment bank staff, for a better understanding, has the vital significance totackle the financial crisis.This paper attempts to study the financial and ethical of the cross subject, Firstof all, based on analysis of the subprime crisis, this paper introduces the causes ofthe subprime crisis and the impact, in order to explain the investment bank staff howimportant ethics is in the field, so as to reveal the research meaning of this article.Secondly discusses the Investment banking in financial ethics has playedimportant role, in detail elaborated the essential sex ethics for investment Banks.First, emphasize the mutual relationship between the financial and ethical, ethics isemphasized for the financial industry is very necessary. With the introduction of therelated financial, pointed out the ethical responsibility of problems existing in theinvestment banking and investment banking in the process of the development ofthe ethical responsibility is quite necessary to give a detailed answer. Second,analysis the relationship between financial efficiency and ethics, based on thedefinition of financial efficiency measure, make an analysis of financial efficiency andthe ethical and moral, to a certain point of view, the financial efficiency is notinfluenced by ethics, but ethics as the foundation of financial efficiency. Third, it alsopoints out the relationship between the ethical and legal, through to the investmentbanking sector development process are briefly introduced, illustrates theimperfections of the legal system. Emphasize ethics can complement the deficiencyof existing law.The next, for the employee of the investment banks moral hazard, emphasizethe investment bank staff moral problems of internal factors, that is an investmentbank, the interests of the employees in the field of treatment is easy to produce the selfishness; Lack of subjective consciousness of moral hazard and excessive financialinnovation brings crisis easily. Moreover emphasizes moral problems of investmentbank staff caused by external factors, namely regulatory philosophy problems;Regulators did not effectively grasp the investment banks net capital and leverage;And credit evaluation institutions is misleading.Then, illustrates some ideas about how to guard against the investment bankstaff moral hazard. First, emphasis on reputation problems related to how tostrengthen the investment banking industry. Emphasis on morality is a kind ofintangible capital; And reputation is the capital of the external performance, so muststrengthen the reputation of investment bank staff to avoid the ethical issuesinvolved. Second, change the previous regulatory system. Strengthen supervisionunit coordinated ability; Adjust the regulatory framework; Increase the regulatorypowers of the fed itself. At last, the emphasis on investment Banks also shouldstrengthen self-discipline. Also need to effectively control investment banks internalrisk; Investment Banks also need to fulfill social responsibility, set up the concept oflive together.Finally, stressed the importance of this issue once again, It will urgency as far aspossible to solve the problem, to stabilize the financial market, make its healthydevelopment has important significance.