Bonuses misselling and laundering money the sectors woes arent over

A survey reveals financial institutions were the subject of more than a third of all media stories on ethical concerns and lapses

Those in the finance sector who hoped 2012 was their annus horribilis in terms of scandals and the collapse of trust, are sorely mistaken. A new study by the Institute of Business Ethics shows finance companies last year accounted for more than a third of all media stories about ethical concerns and lapses, a similar number to the previous year.

The data comes just a day after Barclays, which claims to be rebuilding its shattered image, was condemned for its latest round of executive bonuses, which rose 10% despite tehe bank's dramatic fall in profits and plans to cut 12,000 jobs.

The IBE's research into 1,000 news stories over the past two years found the most commonly reported issue for the finance sector, which includes insurance companies and payday lenders, was executive remuneration, accounting for nearly a fifth of all articles related to business and ethics. The bonus culture of the City in general was a prominent source of news in both 2012 and 2013, closely followed by fraud and theft, largely as a result of the Libor (inter-bank lending) fixing scandal.

The highest proportion of stories across all business sectors on the issue of mis-selling (90%) and money laundering (82%) occurred in the finance industry. Additionally, more than two-thirds related to behaviour and culture and more than half to discrimination. Just under half the articles addressing corporate governance and openness with information also focused on finance companies.

Philippa Foster Back, the institute's director, said: "In the analysis of the business ethics stories in the news, it is clear that the proposals in Sir Richard Lambert's consultation paper on banking standards are long overdue. A change of culture is needed in the finance sector in order for trust to be restored."

When it comes to finding the reasons why the sector is failing to learn the lessons of the past, progressive leaders in both business and finance are clear that the root cause is a loss of purpose.

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