Money, Banking and Finance: Can They Be Ethical?

This contribution examines the relationship between money, finance, banking and ethics, questioning the conditions under which they can serve the common good. After outlining the economic and social functions of money, the chapter explores the development of finance and the risks associated with its growing autonomy from the real economy. Particular attention is devoted to the distortions arising from financial instruments, as illustrated by the 2008 financial crisis. The analysis also focuses on the role of banks and on the importance of adequate capitalisation, reserves, regulation and supervision. The contribution argues that the ethical sustainability of the financial system requires not only sound institutions, but also responsibility, trust and virtue on the part of economic agents. From this perspective, money, finance and banking can contribute to human development and the common good.