The financial and investments managers at Bear Stearns engaged in unethical practices through ignorance and failure to follow procedures in the rule book that ultimately resulted in affecting millions of people, through breach in communication, while abusing the mortgage markets, leading to its collapse in March 2008.
The most significant ethical breach (Ryan Bryner, 2008) for Bear Stearns came in the face of its negligence to adhere to standards / guidelines of business. For example, there are specific guidelines specifying criteria that must be met for a home to be mortgaged. A home in the United Statescannot be mortgaged if its sale price is more than four times the combined household income of all earning members, simply disregarded by Bear Stearns executives and continual of operations.
Another source of ethical failure on Bear Stearns’ part was to incorrectly anticipate the gravity of the situation and relying on false assumptions to carry out its business operations and future investments, resulting in insurmountable losses to the company. Bear Stearns carried out future loan product decisions based on the assumption that there would always be appreciation in the prices of homes, the economy would always be in growth mode, the US is the sole economic superpower, and dollar would prevail Euro as the international currency, and oil prices would increase at normal inflation rates, incomes would be rising and jobs will show significant growth.
These are just excerpts of essays please access the order form for custom essays, research papers, term papers, thesis, dissertations, book reports and case studies.