Financial Crisis: What Will The Collapse of Investment Banking Mean For CSR?

Published on September 19th, 2008 | by

Wall Street Crisis In view of the current financial crisis, it is hard to grasp the fact that overnight investment banks once regarded the kings of Wall Street, are teetering on the edge of stability. The bankruptcy of Lehman Brothers has threatened the survival of Morgan Stanley in spite of the fact that it has just declared great earnings. All eyes are on Morgan and Goldman Sachs, the two big I-banks left standing. Will they go next? What will this mean for corporate social responsibility in the investment banking sector?

Investment Banks have long been the entrepreneurs of Wall Street. Sure they take risk but then look at the return that they bring. In a capitalistic society, who doesn’t respect the work of an entrepreneur? Time and again they have been instrumental for fueling the economy. A high return on investment has enabled many of the investment banks to show a solid to commitment to corporate social responsibility in the last few years:

  • Lehman Brothers partnered with Spelman College a year ago to create a center for Global Finance and Economic Development at the college to prepare women of African descent for successful careers and leadership in the corporate world.
  • Morgan Stanley announced last year the creation of the Morgan Stanley Carbon Bank to assist clients seeking to become carbon neutral.
  • Goldman Sachs has just announced 10,000 women, a series of non-profit and academic partnerships that provide business an d management education to women in Brazil, India, China and the Philippines.

There has been much question about the Fed refusing to bail Lehman out for a paltry amount in comparison to what it was willing to pay to bail out AIG. Although their claim is that it is not socially responsible to bail out an investment bank with taxpayer dollars, the larger questions lies in that is it socially responsible for the Fed to allow the entrepreneurs of Wall Street to fail when they are actually working to serve society by demonstrating commitment to CSR?

Related Posts:

Lehman Brothers Collapse: New Economic Architecture Required
Establishment of the Lehman Brothers Center for Global Finance and Economic Development at Spelman College
World Economic Forum Honors Social Entrepreneurs and Calls For Fast Reform

Photo credit: Google

This post was previously published on Ecopreneurist.com


About the Author

Reenita Malhotra Hora is an Ayurveda clinician, entrepreneur, writer and mom. Her experience has ranged from running Ayoma, an Ayurveda business to running a natural health practice at San Francisco's California Pacific Medical Center. Reenita is a published author of two books books about health and wellness: ‘Ayurveda - the Natural Medicine of India’ and ‘Inner Beauty’. She is also the Editor for Green Options Media's business blogs and a freelance writer for a variety of print and web publications. In quieter moments, she likes to spend her time hiking, swimming the warm seas, cooking with the family or writing fantasy fiction adventure stories for kids from from 2 to 92. Check out her wisdom at www.reenita.com