Are people in the financial industry honest?

In some of my posts especially those that talk about elements of finance, I often use analogies that incorporate shady characters, loan sharks, mobsters, crooks etc. Are people in finance honest? I say “Yes”. Here are my thoughts on the topic.

When I use  analogies that mention criminals, loan sharks, mobsters etc. to illustrate financial concepts, please do not take that to mean that I, in any way, am implying that that is the nature of people who work in the financial industry.

I myself worked for many years in the financial industry and like to think of myself as a very honest person. It is unfortunate that the financial disasters we had lately and scandals like Enron gave a very bad name to the financial sector.

But trust me when I tell you that the financial industry would not be where it is today with literally trillions of dollars in products and services traded every single day, if the practitioners were completely devoid of integrity. In fact, I would say, emphatically, that it is quite the opposite. If it had not been indeed due to the fact that people in the financial industry were predominantly honest, the industry would not have grown to be so huge internationally.

Notwithstanding the intricate legal structures set up everywhere to protect consumer interests, there are also codes of ethics and professionalism upheld in virtually every niche within the financial industry.

When I worked as a trader for a number of years, I handled many transactions every day each worth millions of dollars. We did deals on the phone and our motto was “our word is our bond”. I like to think that attitude permeates all sectors of the financial industry.

In every industry there are bad people and I like to think that in the financial industry bad people are in the minority.

So play along with me when I use humour and stereotypes to explain complex financial concepts but please, please do not think that I am saying this is what people are like in the world of finance.

They are not.

Muneer

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