Professional Standards Research

Professional obligation, ethical awareness and capital market regulation

The global financial crisis revealed significant limitations with the capacity of industry codes of conduct to address ethical deficiencies, prompting a professionalisation agenda. The capacity of the traditional professions to embed restraint has been brought into question, in part because of a conflation between market norms and professional obligation.

In this paper, Professor Justin O’Brien:

  • Assesses the role of codes of conduct as a mechanism to embed higher professional standards
  • Evaluates the tension between the articulation of standards and the process of standard setting
  • Explores the relationship between industry-based and formal regulatory oversight.

Using evidence obtained by comparing approaches to financial regulation in the United States, the United Kingdom and Australia, Professor O’Brien finds an emasculated conception of responsibility has done much to tarnish reputation and legitimacy. He argues that attempts to enhance market integrity will fail unless the toxic effect of market norms on the traditional professions is addressed.

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