ABSTRACT
This chapter focuses on the macro level, presenting the ethical premises and consequences of the two main traditions of financial organisation. In a credit-based economy, the bank is the intermediating institution par excellence. In a financial-market economy, the market is the place where contracts are made between owners and potential users of funds. Financial innovation, spurred by technological progress and conceptual breakthroughs in financial theory, was one of the key features of the Thirty Euphoric Years - although assessments of it have varied. Financial products can roughly be divided into two main categories: standard and non-standard products. Modern finance is inconceivable without derivatives - a radical innovation that is attractive to both holders of idle cash balances and intermediaries. It enables everyone to protect himself against fluctuations in stock prices, exchange rates and interest rates. In order to progress, ethics in finance therefore needs commitment from everyone and input from many disciplines.
