Moral imagination or heuristic toolbox? Events and the risk assessment of structured financial products in the financial bubble

Fisher, C. and Malde, S. ORCID: 0000-0002-7898-5933, 2011. Moral imagination or heuristic toolbox? Events and the risk assessment of structured financial products in the financial bubble. Business Ethics: A European Review, 20 (2), pp. 148-158. ISSN 1467-8608

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Abstract

The paper uses the example of the failure of bankers and financial managers to understand the risks of dealing in structured financial products, prior to the financial collapse, to investigate how people respond to crises. It focuses on whether crises cause people to challenge their habitual frames by the application of moral imagination. It is proposed that the structure of financial products and their markets triggered the use of heuristics that contributed to the underestimation of risks. It is further proposed that such framing heuristics are highly specialised to specific contexts, and are part of a wider set of heuristics that people carry in their cognitive ‘adaptive tool boxes’. Consequently, it is argued, when a crisis occurs the heuristics are not challenged, but are simply put away, and other more appropriate heuristics put to use until a sense of normality returns, and the use of the old heuristics is resumed.

Item Type: Journal article
Publication Title: Business Ethics: A European Review
Creators: Fisher, C. and Malde, S.
Publisher: Wiley-Blackwell
Place of Publication: Chichester
Date: 2011
Volume: 20
Number: 2
ISSN: 1467-8608
Identifiers:
NumberType
10.1111/j.1467-8608.2011.01615.xDOI
Divisions: Schools > Nottingham Business School
Depositing User: EPrints Services
Date Added: 09 Oct 2015 10:03
Last Modified: 09 Jun 2017 13:17
URI: http://irep.ntu.ac.uk/id/eprint/6893

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