Ruthless Compassion in Banking and Finance

Abstract

Beyond the severe economic impact, another consequence of the 2008 financial crisis is the worldwide indignation felt toward the finance industry for its direct involvement in creating this crisis. It is now a befitting question to ask: What, if any, is the noble purpose of finance? I apply the definition of noble as used in Buddhism. I introduce the Buddhist concept of Ruthless Compassion, taught by Tibetan Master Chögyam Trungpa Rinpoché. I assert that Ruthless Compassion is a valuable quality for the job of banker or financier, as it is another tool available to reduce the costs associated with the typical asymmetry of information. A preliminary inquiry is launched into whether this concept can serve as a stepping stone for defining a new value system easily applicable in the finance industry.

Keywords: compassion, finance, crisis, ethics, Warren Buffett, Hoare, Buddhism

JEL Classification: G10