The Social Responsibilities of Banks: Lessons from a Crisis

David Sigurthorsson, PhD candidate

Our understanding of banks and financial institutions' social responsibilities is greatly under-developed. The financial crisis of 2008 has shown this to be most regrettable. An outstanding example of this is the case of the Icelandic banking crisis. The strategies and practices of the banks in question leading up to their collapse can only be described as reckless and irresponsible. At the same time, however, they were hailed as paragons of corporate social responsibility (CSR). The project sets out to answer this main question: What lessons, in terms of the proper scope and content of the duties that CSR entails for banks and financial institutions, can we derive from the Icelandic experience?

The main objectives are:

1. to advance the scholarly debate about CSR with an eye to reducing the conceptual confusion that besets our thinking about CSR and poses a barrier to the formulation of effective CSR policies and perhaps even a threat to the future of the very notion itself;
2. to more specifically contribute to the recently burgeoning discussion about CSR for banks and financial institutions.

This is achieved by means of 1) a theoretical analysis of key concepts and theories, and 2) an empirical analysis of the case in question, based on both primary and secondary data.

As for practical application, this study aims to inform policy, rather than the practice, of CSR. A misinformed policy can only lead to failure in practice.

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Last updated: Thu Apr 11 09:47:00 CEST 2013