Full file at https://testbankuniv.eu/Business-and-Professional-Ethics-7th-Edition-Brooks-Solutions-Manual
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6. LIBOR Manipulations Cause Widespread Impacts (Chapter 2, pages 124-126) What this case has to offer The LIBOR Manipulations Case, which describes an important scandal in easily understood terms, exposes the problem of banks that rely upon public goodwill and trust to operate successfully, abusing that trust to enhance the financial position or profits of the banks and/or their employees at the expense of the public. In fact, the manipulated rates caused harm to bank customers, and others who borrowed (I.e. house mortgages, etc.) or lent funds to the banks all around the world because many contracts are based on these. It is not surprising that banks are often mistrusted by the public. In addition, it is surprising to appreciate how long the manipulation went unchecked, and it is easy to speculate that the top bankers and regulators knew of the practices, and let them continue. Although some executives lost their jobs and their bonuses when their banks were charged, some did not. The size of the fines levied is staggering. Going forward, gentle treatment is very unlikely, so top executives and boards of directors need to be more vigilant with regard to such practices. The emails quoted show the cultural acceptance of manipulation within the banks, and the fact that prowess at such falsification was a source of personal pride. The same thing was evident among the risk assessors at the rating agencies during prior to the financial scandal of 2008. They knew they we acting unethically and/or illegally, but were doing so cheerfully, and without concern. Teaching suggestions I would suggest beginning the case discussion by asking a class member to provide an overview of the case facts. Then I would ask the class how important they thought reputation and trust were to banks. This should trigger a discussion to the effect that they were very important because banks don’t sell durable goods like autos, they sell trust. Then I would ask the class:
If they were on the board of directors, how they would ensure that the bank’s reputation and public trust should be protected? Why the boards of directors of the banks had not done so? How could the traders come to consider their cheating with obvious pride?
Finally, I would deal with the questions at the end of the case.
Business & Professional Ethics for Directors, Executives & Accountants, 7e L.J. Brooks & P. Dunn, Cengage Learning, 2015 Full file at https://testbankuniv.eu/Business-and-Professional-Ethics-7th-Edition-Brooks-Solutions-Manual