Lying, cheating bankers

“IF YOU can only be good at one thing, be good at lying…because if you’re good at lying, you’re good at everything.” Thus a wag imagined one investment banker advising another in a lift. He may not have been far wrong.

In an experiment published by Nature this week, 128 bankers with an average of 12 years’ experience in the industry were split into two groups. The “control” group was asked a series of anodyne questions—for instance, how many hours of television they watched each week. The “treatment” group was quizzed on their work at their bank.

Each banker was then asked to toss a coin in private ten times and report the results. For each toss they could win $20, depending on whether the coin landed on “heads” or “tails”. (If it landed on the wrong side, they got nothing). The bankers reported the results of their ten flips on a computer, and received payment automatically. With enough lucky flips—or shameless lying—a banker could easily make $200 in a matter of seconds.

In both groups, workers from the red-blooded bit of banking—traders and the like—were more dishonest than those in ancillary jobs. Overall, however, the control group was quite honest: they reported that 52% of their tosses had been winners, only slightly above the probable outcome of 50%. The treatment group, in contrast, said that they had got lucky 58% of the time. Nearly a tenth of the treatment group claimed the full $200, despite there being a one-in-a-thousand chance of this happening to an honest flipper.

It was not merely talk of stocks and shares that made people more deceitful: when the authors tried that trick on non-bankers, there was no effect. And people in other professions—say, those in computing and pharmaceuticals—did not become more dastardly when the researchers asked them about their work.

The authors posit that the discussion of work may have put the treatment group into a more materialistic frame of mind: more of them than in the control group agreed with the notion that social status was primarily determined by financial success, for example. Another possibility, about which the authors are sceptical, is that the people in the treatment group were more prepared to lie because their professional identity had taken centre-stage; the feelings of the person inside the suit became less important.

Banks say they are trying to stamp out dishonesty among their staff. Some now make employees attend ethics classes. The researchers want bankers to take the financial equivalent of the Hippocratic Oath, doctors’ promise to “do no harm”. The Netherlands introduced one at the beginning of 2013, in which moneymen solemnly affirm their “responsibility towards society”. But it may not be the bankers who are the problem so much as the setting.