The Ethics of Banking: Conclusions from the Financial Crisis (Issues ...

Duties of Banks Arising from the Nature of Their Tasks 25
this delay in crediting the value of incoming payments. So the banks make an additional
profit, over and above their fees for payment transactions and the interest they
earn from the use of bank deposits for loans. In the case of those customers who are
in the red, the opportunity costs for the customer also include the interest incurred
for any overdrawing of their accounts that they would have avoided if the value had
been credited more immediately.
When German consumer groups investigated the time-span required for the transfer
of monies to German banks, they found that these payment transactions are
often no quicker today than in the era of the Fugger Bank in the sixteenth century.
Slowest and costliest are transactions with foreign accounts, although EU legislation
has speeded up money transfers between EU countries. These delays are not
caused by real problems of transport or telecommunications. Due to modern electronic
communication systems, the international finance world is in a position to
transfer substantial sums of money around the globe in practically no time at all.
The practice of delayed value-dating and the delay of payment transactions cannot
therefore be justified on the basis of technical problems, but is a means used by the
credit institutions to make additional profit.
A problem arises here of justice in exchange between customers whose deposit
accounts are in the red and who therefore pay debit interest on sums credited to
their accounts which would reduce their debts, whilst those whose accounts are in
credit lose a very much lower rate of credit interest on their balance. This valuedating
practice therefore harms the less wealthy, or at least those whose accounts
are in debit, more than those who are wealthy and keep their accounts in credit. This
value-dating practice is not neutral in relation to the criterion of distribution. The
banks’ value-dating practice fulfills neither the criterion of justice in exchange nor
that of distributive neutrality.
Since customers deposit part of their savings in on-demand accounts in order to
have liquid funds available, it is one of the main duties of the bank to ensure that
these are indeed liquid at any given moment. 9 The legal regulation of the liquidity
reserve is aimed at ensuring the banks’ liquidity. Situations are conceivable, however,
in which even the legally defined liquidity reserves are not adequate. The bank
therefore has the duty to fulfill its legal obligations and, at the same time, to exceed
the liquidity-reserve compliance target, if this is required by the nature of their business,
namely unusually high withdrawals of cash by their customers. Here, the duty
of the economic ethics of banking exceeds the ethical minimum of the legal duty.
This observation can also be extended to the money market. The money supply
in the economy is created by cooperation between the central bank and the commercial
banks. The ethics of banking obliges the commercial banks to cooperate with
the central bank to secure the right quantity of money and to avoid inflation, which
9 JOHANNES MESSNER: Ethik. Kompendium der Gesamtethik [Ethics. Compendium of general
ethics], Innsbruck, Vienna, Munich (Tyrolia) 1955, Book VII: Wirtschaftsethik [Economic/business
ethics], p. 431, calls the liquidity principle the first principle of the ethics of banking.