This is the question asked yesterday in an article in the New York Times. They offer two possible answers. One is that the highly competitive conditions in the industry attract bankers who are extremely motivated by money and are very risk-tolerant, meaning the risk of being caught, I guess. The other is that the industry does not have sufficient financial incentives in place (clawing back bonuses when there are violations, for example) that encourage ethical behavior.
Both of these approaches suggest that there is only one sort of motivation, namely financial, and the only questions concern how strong the motivation is (people who are not very motivated might be ethical just out of laziness or risk-aversion), or what sorts of behavior are rewarded financially. Neither views ethics as a intrinsic, a desire to do the right thing, to be honest with other people, or even to have a good reputation, that might act as a constraint on gain-seeking behavior.
The theory of economic regulation provides a context for this discussion. To explain the conundrum of industries and firms that seek or support their own regulation, economists have offered a variety of hypotheses. The conservative, Chicago School version is that they want government to set up and enforce a kind of cartel, preventing entry and keeping prices high. A more liberal approach suggests that businesses understand that without public trust and confidence, they will lose their markets. Once trust is lost, the best way to reestablish it is to have some outside agency provide accountability. Government has usually been a good choice, since government has usually been trusted more than the press or private non-profits.
The conclusion I come to about today's bankers is that they do not think public trust is important to their business. The public does not have a choice: they have to use banks, and all of them are tainted. If the public's money is stolen or wasted or lost, the government will make it good, so no worries. Therefore there is no need for regulation, nor is there any need for the industry to change its culture or reform itself.
So we do not see what I have been hoping to see: some prominent bankers standing up and saying, "There is something wrong with our industry, and we need to change." Until that happens, the crisis of corruption that began in the 1980s with the savings and loans will just keep getting worse.