Ethics recommends concepts of right and wrong conduct. It often addresses disputes of moral diversity. It mostly focuses on human behavior that is acceptable or right or not acceptable. Ethical norms encompass truthfulness, honesty, integrity, respect for others, fairness, and justice. Ethics is important in finance about the financial market because it boosts investors' confidence in the market. If all finance professionals are 100 percent ethical and highly qualified, the financial market will play its role as a market-based financial system and promote economic growth. To achieve the maximum level of ethics in finance, the regulatory body should create tighter regulations and better ethical codes in the name of protecting the investors.
Ethics and Finance Interface.
Financial service professional's mission is to enable clients to grow and protect their wealth. It's for this reason that the financial services industry is regulated, and the regulation is meant to minimize fraud, theft and misuse of funds. Ethics, in other words, purifies the industry by setting the standards of excellence for professionals in financial services. Ethics being a moral in human conduct, the following approaches can be used to explain financial ethics
1. Deontological and Teleological approach.
Deontological looks at the means and not the ends of an action. An action can be right or wrong when morals for taking that action are known. Teleological looks at the ends and not the means. It argues that whether a decision is right or wrong depends on the consequences or outcome of that decision.
2. Absolutism and relativism.
Ethical absolutism acknowledges that standards existing can be applicable universally. For absolutes, many things that are different are wrong. In finance decision making, home country norms and values must be applied to all business situations. Ethical relativism maintains that universal standards do not exist and that ethical standards are about the experience of the creator of the standards.
3. Social responsibilities.
Under this, the business requires acting ethical so as to remain sustainable.
Comparison of the Stock Market Daily Index of Kuwait and the United Arab Emirates.
By having a closer look at the stock market indices of Kuwait and the United Arab Emirates, we get to know how well the stock markets perform. Kuwait's stock market index for the last six years starting the year 2010 with the year 2015 has had its highest point, and lowest point ever reached. From the previous trading session up to December 10th 2015, the stock index decreased by a margin of 49.34 points or 0.86% from 5729.52 points to 5686.15 points. During the last one year, Kuwait's stock index lost 12.2% equivalent of 783.6 points from 6463.76 points in the year 2014. The highest realized stock index in Kuwait was 8300.51 points in May 2013 with a lowest 5655.43 points in November 2012.
United Arab Emirates Stock market daily index as of Thursday, December 10th 2015 decreased with a margin of 0.86 points from 4086.33 points to 4083.86 points equivalent of 0.02%. For the last one year, United Arab Emirates have lost 285.3 points equivalent of 6.53% from 4368.31 in December 2014. The highest stock index of 6237.98 as at April 2005 and a record low of 1001.81 in July 2001.
Country Actual Previous Highest Lowest Dates Units Frequency
Kuwait 5686.15 5729.52 8300.51 5655.43 2010-15 Points Daily
UAE 4086.33 4083.86 6237.98 1001.81 2001-15 Points Daily
These figures are from a close analysis of all the listed Companies in the stock market of the related Countries. The Kuwaiti stock exchange is one of the most dynamic in the world. This is an evidence of the success of the financial ethics that have led to the dominance and popularity of the Kuwait Stock Market. We can, therefore, conclude that Kuwait emerges as one of the most performing and consistent stock market as compared to the United Arab Emirates.
Boatright .R. John. (2013). Ethics in Finance. Chicago; Pearson.
Peter Koslowski. (2011). Ethics in Banking. Netherlands; Springers
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