Partnerships Once Inhibited Self-Dealing
— March 16, 2012
By Richard E. Sylla, Henry Kaufman Professor of the History of Financial Institutions and Markets
On Wall Street, and generally in the financial industry, moral and ethical behavior has another name, fiduciary responsibility. In an investment banking partnership, fiduciary responsibility meant putting the interests of clients first, thereby earning their trust and confidence. Earning that trust was both the short- and long-term goal in building the bank’s business. A young banker such as Smith would hope to learn the ropes from the bank’s seasoned partners, absorb their ethical standards, build a career, and one day become a partner. Partners were cautious in taking risks because their own money, all of it, was on the line.
Read full article as published in The New York Times.