Wall Street is facing an “incredibly disturbing” trend.

Students at business schools who think of themselves as “highly ethical” aren’t interested in a career on Wall Street. They don’t see the big banks as moral enough for their standards.

That’s according to William Dudley, the president of the New York Federal Reserve. Dudley knows a thing or two about ethics at big banks. He used to work at Goldman Sachs and now Dudley leads one of the watchdogs in charge of overseeing Wall Street’s activities.

Dudley was bothered by a recent conversation with business school deans. They told him that business school students who consider themselves “highly ethical” are choosing not to work in financial services.

“As long as we have that self selection out of the financial industry by people who view themselves as highly ethical…that tells you we have a problem,” Dudley said at the Economic Club…