Current Ethical Issue In Business

Current Ethical Issue in Business a few(prenominal) heap have been left unaffected by the advanced financial crisis. Problems in the subprime owe market have caused a ripple affect, which has torn through the economy. As a upshot of the economic downturn, the ethics of top executives at financial firms and regaining companies are now in question. Home foreclosures, lack of available credit, and enormous loss to retirement savings accounts are just a few of the consequences of this unethical behavior. In addition, the bailout provisions provided by the giving medication have left American taxpayers facing a raise in taxes. Recently, the ethical conduct of employees at American International Group, Inc. (AIG) has been brought into question. The subprime owe crisis that America is now facing has been well-formed construction for several years. The unethical behavior of financial firms and insurance policy companies has lately been plentifuly realized. The subprime mortgage crisis was caused primarily by cupidity and forgetful judgment of the leaders in the financial industry. Loans were existence issued to people who could not afford to pay them back. The loans that were being issued were past repackaged as collateralized debt obligations, a type of derivative, and resold to investment banks.

Since the inherent mortgages that make up these derivatives were provided at a subprime rate, the profit margin was very(prenominal) proud for lenders. Financial firms were unable to resist these profits, even though they knew the encounter they were taking. In order for the fina ncial firms to protect themselves from the u! nderlying risks of these subprime mortgage products they hired insurance companies to protect them. AIG was the largest insurer of the collateralized debt obligations, which were created from the subprime mortgages. When the subprime mortgage credit line collapsed AIG was unable to meet their financial obligations. The government was forced to shade in and provide the company with the outstanding needed to anticipate bankruptcy....If you want to get a full essay, order it on our website: OrderCustomPaper.com

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