The professional ethics of bankers. Milieu formations and professional ethics in global finance

Project management: Prof. Dr. Sighard Neckel

In the project “The professional ethics of bankers. Milieu formations and professional ethics in global finance” investigated whether and in what way group processes and milieu formations of professional actors in international finance take place, which could become the social basis for the emergence of professional ethics and a “critical professionalism” in finance.

Against the backdrop of the financial crisis, which has highlighted not only the economic but also the far-reaching social consequences of financial economic activity, we were particularly interested in the extent to which and under what conditions financial players (can) refer to the social dimension of their economic activity and also take into account the negative external effects of their business practices.

Since hardly any other occupational groups have been researched as little as the professions in banking and finance, the research also aimed to close this knowledge gap to some extent and, if necessary, to correct common stereotypes of bankers.

The project is based on the central insight of practice theory that actors in the economic system are not exclusively interested in maximizing their own benefit, but are also concerned with legitimacy and recognition. The sociologically relevant question is therefore not whether or not there is morality on the financial markets, but what financial actors understand by morality and social responsibility and what significance they attach to this in their professional practice.
With reference to Émile Durkheim’s theory of the normative integration of functionally differentiated societies, the research results were able to confirm that professional milieus and their professional ethics play a central role in the creation of “solidarity” and the “restraint of individual egoisms” in modern social orders.

The research was based on comparative ethnographic milieu research on financial professions in the banking centers of Frankfurt and Zurich. Based on the question of the respective self-image of their own professional activity, the “inner social milieus” (Durkheim) of bankers were examined in their practices and symbols, in their world views and community patterns, as well as those institutional processes of ethical renewal in the financial sector that are documented, for example, in the founding of “ethical banks” or in critical debates within professional financial organizations.
The analysis of the interviews brought to light a dilemma: although financial players certainly associate normative demands with their profession, these demands do not touch on the social sphere in which normative action would be particularly necessary. The “professional morality of bankers” is primarily presented as an “internal morality”, which is addressed to customers, employees or colleagues, while society only plays a negligible role as a normative point of reference.

The homogeneous composition of the social milieus from which leading financial players are increasingly recruited is closely linked to this inward-looking professional ethic. The social disembedding of financial economic activity is therefore not only due to a system logic that elevates profit and competition orientation to its central principles, but also to the homogeneous milieus of financial players who have largely lost contact with other lifeworlds.

The fact that other normative orientations are also possible within the financial system was shown by the analysis of ethical credit institutions, whose everyday practices are not exclusively based on principles of economic profit maximization, but are highly compatible with social sustainability discourses. Criticism of the conventional banking system and its internal morals in particular is, as was shown, a constitutive and recognized component of the professional biography of ethical bankers.

The most important publications in this project:

Lenz, Sarah: “Normative change in banking? An analysis of critical distancing of ‘ethical bankers'”, in: K. Backhaus /D. Roth-Isigkeit (eds.): Practices of Critique. Frankfurt am Main: Campus, 2016.

Czingon, Claudia: “‘Wirtschaftsethik’, ‘Corporate Social Responsibility’ und ‘Selbstreflexion’: Selbstkritik im BWL-Curriculum deutscher Business Schools?”, in: K. Backhaus/D. Roth-Isigkeit (eds.): Practices of Critique, Frankfurt am Main: Campus, 2016.

Claudia Czingon and Sighard Neckel: “Banking in gesellschaftlicher Verantwortung? On professional ethics in the financial sector”, in: WestEnd. New Journal for Social Research , 01/2015, S. 71-84.

Lenz, Sarah: “Ethical banks in Germany – niche or avant-garde? Eine Analyse der Selbstdarstellungen alternativer Geldhäuser”, Institut für Sozialforschung Working Papers, Frankfurt am Main 2015, [online] http://www.ifs.uni-frankfurt.de/wp-content/uploads/IfS-WP-7-Herzog-Lenz-Hirschmann.pdf [05.10.2017].

Lenz, Sarah/Lisa Herzog/Edgar Hirschmann: “‘Ethische Banken’ Nische oder Avantgarde?”, in: WestEnd. New Journal for Social Research , 01/2015, S. 85-95.

people in this project:

Project management / contact person

Neckel, Sighard, Prof. Dr.

Project staff

Czingon, Claudia