The Jones Bank Ltd has two departments.

a) a pension fund department, which invests money on behalf of clients and customers, by investing in bonds, shares and so on.

b) a merchant bank department, one of whose clients is the prestigious and dynamic Sampson and Brown Ltd, which is to offer a new tranche of shares to the investment community.

1. Identify the potential conflict of interest.

2. DISCUSSION In times of recession, it is the banks who ultimately decide whether a particular business survives or fails. There is a widespread view that banks should support small businesses come what may, as not to do so would be socially irresponsible. Give reasons for and against this view