In a 2009 report, bank supervisors pointed to widespread failures in corporate governance and inherent conflicts within firms’ compensation structures as lead culprits of the financial crisis.1 In its broader aftermath, however, others argued that a severe crisis of culture existed in the industry. John C. Bogle, founder of Vanguard Group, termed it a “crisis of ethic proportions.”2
A perceived erosion in banks’ ethical standards was held to have underpinned many systemic factors that led to the crisis, such as easy “sub-prime” credit, high leverage ratios, weakened capital levels, inadequate risk management, and a pervasive “I’ll be gone, you’ll be gone” mindset among many bankers and traders brazenly unconcerned for personal accountability.
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