When we look back at times of financial crisis or missteps, we frequently find that a key cause was elevating short-term profitability over long-term sustainability and consumer welfare. It was not long ago that so-called exotic mortgages originally designed for niche borrowers became increasingly marketed to low- and moderate-income borrowers who could not sustain them, ultimately with disastrous results.
In addition to the financial consequences for individual consumers, the drive for unsustainable profit can contribute to distrust in the financial system, which is detrimental to the broader economy. It is critical that firms providing financial services consider the long-term social benefit of the products and services they offer.