Margin Call: What If John Tuld Were Christian? Thomistic Practical Wisdom in Financial Decision-Making

Universidad de Navarra, Facultad de Ciencias Económicas y Empresariales, Working Paper nº 01/17

36 Pages Posted: 21 Mar 2017

See all articles by Marta Rocchi

Marta Rocchi

University of Navarra; Pontificia Università della Santa Croce - MCE Research Centre

Ignacio Ferrero

School of Economics and Business

Robert E. McNulty

Bentley University - Center for Business Ethics (CBE)

Date Written: February 1, 2017

Abstract

Margin Call is a film depicting the high-tension 32 hours of an investment bank that discovers that its financial holdings are essentially worthless because it has become highly overexposed in the risky trading of mortgage-backed securities and the entire market is set to implode, triggering what the bank leaders know will be a global financial crisis. In a ten-minute overnight meeting, the CEO, John Tuld, must make a difficult choice for the firm and for himself. This paper aims at analyzing Tuld’s behavior in the light of the virtue of prudence as described by Thomas Aquinas, and reflects on how the problem might have been handled differently if John Tuld had been guided by Christian moral teachings. It also examines whether Christian ethics, with its ancient heritage, has sufficient specificity and transformative capacity to serve as a guide in contemporary financial decision-making.

Keywords: Practical wisdom; Christian ethics; management

Suggested Citation

Rocchi, Marta and Ferrero, Ignacio and McNulty, Robert E., Margin Call: What If John Tuld Were Christian? Thomistic Practical Wisdom in Financial Decision-Making (February 1, 2017). Universidad de Navarra, Facultad de Ciencias Económicas y Empresariales, Working Paper nº 01/17, Available at SSRN: https://ssrn.com/abstract=2936288 or http://dx.doi.org/10.2139/ssrn.2936288

Marta Rocchi

University of Navarra ( email )

Camino del Cerro del Aguila, 3
Pamplona, Navarra 31080
Spain

Pontificia Università della Santa Croce - MCE Research Centre ( email )

Piazza di Sant'Apollinare, 49
Roma, 00186
Italy

Ignacio Ferrero (Contact Author)

School of Economics and Business ( email )

Edificio Bibliotecas-Este
Pamplona, Navarra 31080
Spain

Robert E. McNulty

Bentley University - Center for Business Ethics (CBE) ( email )

175 Forest Street
Waltham, MA 02452-4705
United States

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