Will drug test reduce risk in investment banking?

Atul Shah, a senior lecturer in accounting and finance, raised the issue of drug testing in financial organisations at an event in London to launch the new report Risk Culture in Financial Organisations.

At the event, Mr Shah asked the authors of the report when drug testing will be introduced to the City. The response was that there was no need for drug testing in the City, as there was not a serious drug problem.

Those who work in the City for any length of time will see some evidence of drug abuse. Abuse of recreational drugs is a problem within the wealthy elite and often dependency issues arise. Any drug-taking in the workplace can seriously affect a person’s judgement and can potentially lead to financial losses.

Mr Shah, writing for The Conversation, suggests that risk-takers show characteristics of addiction in their work and that the long hours and stress can drive some workers to abuse addictive substances to help them to cope.

Mr Shah believes that denying the problem of drugs in financial organisations is ignoring an important area of risk and that there needs to be a cultural shift in thinking within city businesses. Mr Shah writes: “It is high time that we apply simple, practical and scientific solutions to stop widespread drug use and addiction in the City. If the banks do not agree to this, the Financial Conduct Authority must impose it and enforce it.”

Risk Culture in Financial Organisations was written by Michael Power, Simon Ashby and Tommaso Palermo from the London School of Economics and Plymouth University.