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ARE18 notes - ARE18 Business ethics ethics in a business...

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ARE18 1-10-11 Business ethics - ethics in a business context. a consensus as to what constitutes right or wrong behavior in the world of business and the application of moral principles to situations that arise in a business setting. FDIC started because of the bank failures during the great depression. If a bank fails the FDIC reimburses the clients up to 250,000 dollars, so that people have confidence in the banking system. Banks pay a small membership fee + a small surcharge. Banks would have gone broke in 2007-2008 if not for the taxpayers. People running these institutions were participating in highly unethical behavior. Loaning money to people that did not deserve it. How a bank works money in bank - checking or savings. . liability/debt to the customer. If a bank has a dollar, they get to loan 7x that money out to other people. Made loans to people who couldn't repay them because it is not the banks money. its the depositors money. Second reason: the way they calculate their profits. Bank has a certain amount of money, pays 5%, uses the money to loan out to someone else for 10% interest rate. etc.
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This note was uploaded on 01/17/2012 for the course ARE 18 taught by Professor Maxey during the Winter '08 term at UC Davis.

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ARE18 notes - ARE18 Business ethics ethics in a business...

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