Ethical compatibility of socially responsible banking: Comparing the Japanese main bank system with the USA

Kanji Kitamura, Loyola University Chicago

Author Posting (c) Elsevier B.V.,2022. This article is posted here by permission of Elsevier for personal use, not for redistribution. The article was published in Research in International Business and Finance,VOL 62, May 30, 2022,


Although the broad idea of socially responsible banking is widely accepted, no precise definition of ethical banking is available because of various ethical preferences. This paper develops the concept of ethical compatibility as a theoretical description of ethical banking. It offers a multilevel framework to illustrate the compatibility between the regional ethics and preferred forms of ethical banking prevalent in Japan and the USA. This paper first revisits the two paradigms of financial systems and examines the two types of business purposes as ethics. Drawing on the literature concepts, this study posits a conceptual framework demonstrating the compatibility between the actors, which are dynamic yet representative at each level. This paper concludes that the ethically compatible form of banking is socially responsible in the respective societies. Additionally, this paper advances the concept of relationship lending by making it globally applicable.