A Virtue Ethics Approach in Finance

The global financial crisis and the subsequent economic recession brought attention to bear on banking and financial activities. Although the financial crisis had several causes, financial and political economists have been largely concerned with the institutional side of the crisis, often marginalizing an ethical dimension as something that diverts attention from what they consider the real structural problems of a complex sector. This chapter (i) reviews existing literature on the ethics of finance from the perspective of virtue ethics and, based on that literature, (ii) offers an explanation of how the institutionalist perspective can be integrated with the ethical approach typical of virtue ethics, showing that finance can be an activity that enhances the good of those who practice it and similarly enhances the effectiveness of financial institutions to contribute to the good of society.