General Knowledge · Banking Ethics
A bank pushes 'Project Accelerator' to aggressively sell complex interest-rate derivatives with hidden risks to SMEs, burying details in a 100-page document. While sales targets trigger massive bonuses, a whistleblower reveals that the bank's treasury is taking the opposite market position against its own clients to maximize corporate trading profits. Which summary statement encompasses the primary ethical violations happening here?
- 1Only the lack of transparency in the 100-page document constitutes a procedural issue.
- 2Mis-selling, Conflict of Interest, lack of Transparency, and a breach of Fiduciary Duty by betting against clients.✓
- 3The actions are acceptable because corporate governance prioritized maximizing short-term revenue for shareholders.
- 4The Chief Risk Officer should disregard the whistleblower since sales operations and treasury trading positions are legally segregated.
Correct answer
Mis-selling, Conflict of Interest, lack of Transparency, and a breach of Fiduciary Duty by betting against clients.
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