This Special Issue provides key innovative elements and concepts related to ethical banks in a short, easy-to-use format divided in high quality scientific papers. They contain important papers that relate to those significant aspects relate to ethical banks: situation of ethical banks in Europe, the innovative forms to measure the social impact in banking, comparison of ethical banks before and after the financial crisis, the ethical banks understanding as a sustainable business model, the impact of ethical codes in banking and the future pathway for ethical banking.

1. Taadler Publisher House
Presents
the Special Issue
edited by
Prof Dr LEIRE SAN-JOSE
University o f Basque Country UPV/EHU,
ECRI Research Group at University of the Basque Country, Bilbao,
Spain
University of Huddersfield, United Kingdom
Prof Dr JOSE LUIS RETOLAZA
AURKILAN Business Ethics Research Institute,
Institute of Applied Business Economics (IEAE), (UPV/EHU), Spain

2. Preface
This Special Issue provides key innovative elements
and concepts related to ethical banks in a short,
easy-to-use format divided in high quality scientific
papers. They contain important papers that relate
to those significant aspects relate to ethical banks:
situation of ethical banks in Europe, the innovative
forms to measure the social impact in banking,
comparison of ethical banks before and after the
financial crisis, the ethical banks understanding as a
sustainable business model, the impact of ethical
codes in banking and the future pathway for ethical
banking. Each paper entry is written by a scholar.

3. Prospective Innovation at Ethical Banking and Finance
Social Banks and their Profitability: Is Social Banking in line with Business Success?
Olaf Weber
School for Environment, Enterprise and
Development - University of Waterloo,
Canada
Social banking is conducted by
social, ethical or alternative banks,
financial cooperatives, and credit
unions. In contrast to conventional
banks, social banks conduct their
business to create a positive social,
environmental, or sustainability
benefit. This study analyses both,
the missions of social banks and
their financial figures. Based on
data of the members of the Global
Alliance for Banking on Values, a
global association of social banks than their conventional
and microfinance institutions, we counterparts. Regarding their
conducted a qualitative analysis of financial health all institutes in the
the missions of the member
sample meet the Bank for
institutes. Furthermore we
International Settlements (BIS)
explored whether their loans and capital ratio. We conclude that it is
investments follow their mission possible to follow the concept of
and whether this business strategy social finance and to be financially
is able to achieve attractive
sustainable, if social banks provide
financial return.
the tangible and intangible
The results suggest that the resources.
banks follow the mission of social Key Words: Social banking, ethical
finance and prefer social impacts banking, blended return, shared value,
credit union, financial return,
over financial returns without
neglecting financial sustainability. resource-based theory,
With respect to financial indicators capital ratio.
social banks are, though being still
small, especially in the years 2007
to 2012 more profitable than
conventional banks or credit unions
and presented stronger growth
http://taadler.com/a29

4. Prospective Innovation at Ethical Banking and Finance
Fostering Sustainable Finances: The consideration of a Third Party Certification Program
characteristics appearing
and sustainable finances should be
Land use, Infrastructure and Transport - repeatedly in the literature, stressing considered as an indispensable one.
Mercator Research Institute on Global the dynamism of the concept.
Nevertheless, public mistrust leads
Commons and Climate Change (MCC)
Powerful drivers towards
to the necessity of supporting and
gGmbH, Germany
sustainable practices in strong
protecting those truly sustainable
profit-oriented markets are
initiatives within the financial sector.
sustainable consumer behaviour and This research concludes with the
social expectations. Mixed
idea of a third party certification
methodology is used to analyse the system as a tool to protect and
current and future scenarios of
enhance the adequate development
sustainable finances from the
of sustainable finances.
Sustainable development is an
ongoing process based on a set of consumer perspective. The study
principles that have to continue to focuses on the potential to foster Key Words:
sustainability and on the long-term
spread throughout all economic
Investor rationality, Financial
competitiveness.
activities. Looking at the current
Institution,
economic scenario, the
Although there are strengths
Financial Service,
transformation of the financial
and opportunities for further
sector appears crucial. I define a
development, there are also threats Standard.
common understanding of
that need immediate solutions. As a
sustainable finances through the
consequence of the financial crisis,
identification of those
society is seeking new alternatives
http://taadler.com/a34
Blanca Fernandez Milan

5. Prospective Innovation at Ethical Banking and Finance
The emergence of ethical banks – a way towards sustainable banking business
over time.
investigation, with an heuristic and
The first part of the paper proceeds exploratory nature, called Cluster
Analysis, in order to observe how
The Bucharest University of Economic to a review of the main sustainability
the profitability (ROA, ROE), liquidity
frameworks, comprising
Studies, Romania
(the share of loans in deposits),
international principles and
exposure to risk credit (share of
standards that can be joined on a
loans in total assets) and capital
voluntary base by financial
institutions and companies across adequacy (BIS1 ratio) are
the world. The second part provides characterized by homogeneity at the
delineation between the business level of financial institutions that
The paper promotes the
have implemented an ethical,
model of ethical banks and the
incorporation of sustainable
sustainable business.
traditional one, emphasizing the
development principles in the
banking business, as an alternative particular mission and objectives of Key Words: ethical banks,
sustainability framework,
to traditional banking activities, the ethical banks. However, the
common denominator of the two sustainable
more so in the context of global
types of institutions consists in the business model,
financial crisis, because an ethical
additional risks, namely the
business model has the ability to
financial indicators,
regenerate customer confidence in environmental and social risks,
cluster analysis
the financial system's institutions, arising indirectly, from their
can transform financial profits into customers' operations. The third
social welfare and it is sustainable part proposes an empirical
Teodora Cristina Barbu,
Iustina Boitan
http://taadler.com/a28

6. Prospective Innovation at Ethical Banking and Finance
Ethical Banking: an alternative to tackle financial exclusion? The case study of FIARE
providers, leaving these people out leads to an approach of the
of the operating dynamic of their
suitability of this initiative to tackle
School of Economics and Business
financial exclusion in the post-crisis
Administration The University of the environment. As a result, we can
Basque Country, Spain
deduce that financial exclusion is
period.
currently an issue of great interest
worldwide, obviously for people
Key Words: financial exclusion,
involved in this situation, but also for ethical banking, FIARE, social
the financial system, the enterprise transformation.
network, public institutions and
social organizations.
Abstact
The purpose of this paper is to
contribute, through the exemplary
Nowadays, while the financial
case of FIARE, to
system appears to be more
strengthen alternatives with a high
widespread than ever, we note that degree of social transformation like
a significant portion of the
Ethical Banking. A qualitative
population (not only in less
research is carried out to study a
economically developed countries, local banking project and see its
but also in Europe and the United implications to for social and
States) cannot access basic financial solidarity economy. The analysis
services offered by major banking detects strong and weak points and
http://taadler.com/a41
Igor Etxabe Iruretagoiena

7. Prospective Innovation at Ethical Banking and Finance
A theoretical comparison of Codes of Ethics among the three Mayor Banks in Spain: Grupo
Santander, Grupo Bilbao Atlántico Vizcaya and CaixaBank
and the content of the ethics codes.
Just to find out how these three
Universitat Ramon Llull , Spain
banks “present” their Ethics Code to
Society in order to know a scope of
the situation of Ethics’ Codes,
Conduct Codes nowadays in these
three Spanish banks. Previous to
establish the comparison we will
consider “values” and “principles”
of the three banks if any. The
background of this paper is to find
Abstract
out how these three banks formally
present their way to proceed as an
The aim of this paper is to establish
element of their transparency.
a theoretical comparison among
Codes of Ethics in the three major
banks in Spain: BSCH, BBVA and
Key Words: codes of ethics, Spanish
CaixaBank. We analyse the
documents in their web corporate banks and values
pages and establish a comparison
between both the formal aspects
Carlos M. Moreno
http://taadler.com/a40

8. Prospective Innovation at Ethical Banking and Finance
Socially Responsible Finance and Socially Responsible Banking as New Phenomena in
Financial Theory – A Systematic Classification and Explanation
range of new products originated – sustainability. In this paper, I will
reaching from microfinance to
integrate these specific
sustainable investment funds
characteristics at different places
through to peer-to-peer lending – into the traditional model of a
some of which already have become financial system thus not only
established in financial markets. Best classifying these new occurrences
known is probably the concept of but also trying to give an
Socially Responsible Investment
explanation for their existence.
(SRI) which however covers only a Key Words: Financial Products,
small part of SRF. Until now, there is Financial Intermediation, Financial
neither a uniform definition of the Services, Financial System, Non-bank
Abstract.
terms SRF and SRB nor does a
Financial Institutions, Regional
Socially Responsible Finance
theoretical foundation, explanation, Currencies, Socially Responsible
(SRF) and Socially Responsible
or systematic classification of these Banking, Socially Responsible
Banks (SRBs) are relatively new
phenomena exist. In contrast to the Finance, Islamic Finance,
phenomena which could be
classic concepts which put an
Micro-Finance, Banks
observed in the financial markets
emphasis on profit maximisation,
during the last years. SRBs
SRF and SRB can be characterised by
registered an enormous increase in
the fact that they consider
customers during the financial crisis,
ecological and social sustainability as
and on the financial markets a wide
at least equivalent to economic
http://taadler.com/a43
Gregor Krämer
Alanus University of Arts and
Social Sciences, Germany

9. Prospective Innovation at Ethical Banking and Finance
The ethical banks in Europe during the crisis:
information transparency and placement of assets
Leire San-Jose,
Jose Luis Retolaza,
Dayli Bocanegra
University of the Basque Country,
Bilbao, Spain
Abstract.
The financial crisis has increased the
importance of the transparency in
banking because of the relevance to
invest the money of savers and the
effect of a risky investment.
There are some banks, called Ethical
Banks that show in a transparent
way the collocation of their money.
Then, this research analyses the
Key Words: ethical banking, index,
principal differences between ethical
transparency, quality of assets,
banking and the rest of funding
financial crisis.
organization: the information
transparency and collocation
of asset comparing before and
during the crisis (2007 vs. 2011 data)
and using the European Ethical
Banks data. There is an index, RAI
(Radical Affinity Index) that
integrates this information;
therefore, we have used a part of
the index, the RAI alpha to
show the transparency and
placement of assets as the most
important factors of ethical
banking to resist the negative effect
of the actual financial crisis.
http://taadler.com/a42

10. Prospective Innovation at Ethical Banking and Finance
Socially Responsible Finance and Socially Responsible Banking as New Phenomena in
Financial Theory – A Systematic Classification and Explanation
Carlos Ballesteros,
Lucia Herden
current financial system and has caused the case of the Spanish initiative FIARE
a great loss of confidence in the
does not have the pretension of
society. The ethical banks responds to projecting the social impact of this
these weaknesses and its great growth company, but the detection of the
ICADE. Universidad Pontificia Comillas,
since the crisis points out that that is difficulties and facilitators in the
Spain
the alternative that many people are measurement of the social impact of
looking for. Yet it is still a small and
such a project. The concrete research
little-studied sector, but the growing questions this paper aims to answer are
presence indicates that it is gaining
1. To what extent can the existing
influence in the financial market. The
methods for measuring the social
growth of the sector also brings new
impact of the Ethical Bank used?
challenges that need to be overcome in 2.
What other aspects should be
order to be able to continue to grow.
considered in terms of measuring
the social impact of banking
ethics?
One of these challenges is the
Abstract
justification and impact
The present work aims to promote the communication. Although the issue of Key Words:
search for a valid method to measure measuring the social impact is
Social Impact,
the social impact of ethical banking
highly topical in areas close to the
using the case study as methodology. ethical banking sector and, therefore, ethical banking
Rather than develop a method for
there is a wide variety of different
measuring the social impact of the
approaches (as e.g. SROI) there is not
ethical banking it tries to analyse the enough research in the concrete case
existing methods and the current
of the ethic banks‘ social impact. The
situation.
application of different approaches to
The financial crisis of 2008 has
highlighted the weaknesses of the
http://taadler.com/a30

11. Prospective Innovation at Ethical Banking and Finance
Future pathways for ethical banking, new changes in the post-crisis period:
A case for micro financing to the poor
reaching from microfinance to
integrate these specific
characteristics at different places
International Consultant, Micro-Finance sustainable investment funds
through to peer-to-peer lending – into the traditional model of a
India
some of which already have become financial system thus not only
established in financial markets. Best classifying these new occurrences
known is probably the concept of but also trying to give an
Socially Responsible Investment
explanation for their existence.
(SRI) which however covers only a Key Words: Economic-ethics
small part of SRF. Until now, there is nexus, Microfinance industry,
neither a uniform definition of the Amartya Sen, ethical banking,
terms SRF and SRB nor does a
Abstract.
unethical financial practices,
theoretical foundation, explanation,
Socially Responsible Finance
or systematic classification of these wealth and greed, Ten
(SRF) and Socially Responsible
phenomena exist. In contrast to the commandments
Banks (SRBs) are relatively new
classic concepts which put an
phenomena which could be
emphasis on profit maximisation,
observed in the financial markets
SRF and SRB can be characterised by
during the last years. SRBs
registered an enormous increase in the fact that they consider
customers during the financial crisis, ecological and social sustainability as
and on the financial markets a wide at least equivalent to economic
range of new products originated – sustainability. In this paper, I will
http://taadler.com/a27
V.Rengarajan

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