Ethical Issues in The Policy Response to The 2008 Financial Crisis

This chapter will deal with some issues that are highly topical at present, at least in the advanced Western economies: the moral questions that surround the large-scale bailout of the banks and other financial institutions that has been mounted by central banks and by governments since September 2008. This may seem a very specific topic of interest only in passing during these years of crisis but in fact we will show that the issues are of perennial interest. Apart from the fact that the broadly capitalist-style financial system that today predominates in the world economy is inherently subject to bubbles and crises,¹ so giving perennial relevance to moral reflections on the policy responses to such crises, we shall show that some of the equity issues go right to the heart of the critique of contemporary capitalism as a socio-economic system. This locates the chapter very firmly in Level 2 of critique as outlined in Chapter 2 although some of the reflections on equity in particular will take us in effect to Level 3 of critique: the assertion of certain universal values in relation to the whole world financial system.