FSA chairman, Howard Davies said: "The reputation of the City as a clean and fair place to do business has been hard won over the centuries but it can easily and very quickly be lost. Recent events, especially in the US, demonstrate that a breakdown of ethical standards within a firm can carry high reputational and financial penalties.
"The FSA Principles - our high level standards - for businesses and practitioners - are based on ethical values. But the underlying ethos is not fully understood or consistently applied by everyone working in the industry and we want to stimulate further debate about how firms build our regulatory principles into their own ethical frameworks .
"This paper focuses on the territory where business ethics and regulation meet. We explain what we mean by 'ethical behaviour' and why it matters for the financial services industry. We want to establish a clear and explicit shared understanding about what integrity means in practice and the paper sets out a framework for discussion."
The FSA is not suggesting the introduction of new or more Rules for firms - the purpose is rather to ask questions that raise key concerns about standards. The paper seeks to test assumptions about what types of behaviour are acceptable, what might constitute sharp practice and how and where people draw the line. The outline ethical framework is accompanied by practical examples of day-to-day scenarios that focus on the kind of issues that people have to face, how they might deal with them and the value judgements they consider in doing so.
