Tutor Name: David Pearson
Module Code: BFE0012

Introduction to Financial Services

By Martin Chance
U1065521
Deadline: 8/04/2011
Assignment:
Banking: An Ethical Dilemma?

Introduction
In this report, I plan to discuss the question Banking: An Ethical Dilemma? Within this is I will discuss ethical dilemmas in association with banking. I will firstly start by giving definitions of what is meant by the terms: Banking, Ethics, and Dilemma.
From here, I will go on to identify what banks are and what the roles and importance are for the economy. Next, I will go on to explain banking operations and with this identification, I plan to then discuss the ethical dilemmas and show my opinion on the question ‘Banking: An Ethical Dilemma?’
I will
“Although banks create no new wealth but their borrowing, lending and related activities facilitate the process of production, distribution, exchange, and consumption of wealth. In this way they become very effective partners in the process of economic development.” (http://www.blurtit.com/q197532.html)
What do banks do? This is a question, which many people may be confused by. People deposit their money into a bank for feeling that it will be kept safe for them to collect at any time, when in reality when someone’s deposits money is to their account, the banks promptly lend the money out to another customer and in result creates a cycle. In fact, when a customer makes a deposit at a bank only an initial 8% is kept in banking funds, 90% of the deposit and lent out to another customer creating more profit for the bank.
As well as accepting deposits banks also repay against written order, create account, lend money, render account, reasonable notice closer, maintain secrecy (Tourniers exception), interest and fees, set off, return cheques and pay against monies held. Although these are the main roles this is not an indication of the products and service which are provided by individual banks and may differ between them.
Therefore, when looking into banking, where can we draw the line to say whether a bank is being ethical or not? I think the first factor, which needs to be