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Governance & Culture Reform

New York Fed

Speeches

Hennessy: Emerging Trends in Culture Reform: The New York Fed’s Perspective

In remarks at 1LoD's Culture & Conduct Deep Dive event, Head of the Governance and Culture Reform Initiative James Hennessy discussed three emerging factors that have deepened the study and analysis of culture.

(DATE: MARCH 22, 2022)

Hennessy: Shelter from the Storm

At the Annual Culture and Conduct Forum for the Financial Services Industry, Head of the Governance and Culture Reform Initiative James Hennessy provided an update on the initiative and thoughts on psychological safety.

(DATE: November 26, 2020)

Stiroh: The Impact of the Pandemic on Cultural Capital in the Finance Industry

In remarks at the Risk USA Conference, EVP Kevin Stiroh discusses the importance of a firm's culture in determining business outcomes and how that culture may be impacted by the Covid-19 pandemic.

(DATE: NOVEMBER 16, 2020)

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Events

Culture and the New Workplace

This webinar considered a range of questions about the evolution of the workplace and its influence on organizational culture.

(DATE: OCTOBER 4, 2022)

Shifting Norms? The Intersection of Technology and Culture in Financial Services

This webinar focused on how technology and digitization have disrupted or otherwise influenced culture in financial services.

(DATE: JULY 6, 2022)

Trust in Banks: Where Are We Now?

This webinar explored the evolution and current state of trust in financial services and how public perceptions about industry culture contribute to that trust.

(DATE: MARCH 29, 2022)

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Podcast Series

Banking Culture Reform: Norms, Mindsets, and Decision-Making

This nine-episode series examines the norms and mindsets that contribute to the spectrum of decision-making, from ethical to unethical, through interviews with thought and industry leaders representing a broad range of experience across banking, regulation, psychology, neuroscience, and aeronautics and space.

(DATE: November 2021)

Publications

Bank Culture and the Official Sector: A Spectrum of Options

Culture is a topic of growing interest in financial services. This article by New York Fed senior leaders can prompt conversations with academics, regulators, and bankers about how culture contributes to decisions and behaviors in the financial services industry.

(DATE: February 2020)

The Economics of Why Companies Don’t Fix Their Toxic Cultures

In this Harvard Business Review article, Head of Supervision Kevin Stiroh discusses the role culture plays in corporate misconduct and shares why he thinks these problematic cultures persist.

(DATE: MARCH 22, 2018)

Misconduct Risk, Culture, and Supervision

In this white paper, the conceptual argument is made for why supervisors should care about a financial institution's culture and how it is supports supervisors' approach to risk management.

(DATE: DECEMBER 7, 2017)

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Other Resources

Speeches

Shepperd: How Culture Must Change to Meet Expectations

Emily Shepperd, Chief Operating Officer and Executive Director of Authorizations at the Financial Conduct Authority, discusses the importance of culture in delivering good consumer outcomes and assessing fitness and propriety of staff.

(DATE: JUNE 26, 2023)

Monaco: Remarks at American Bar Association National Institute on White Collar Crime

Deputy Attorney General Lisa Monaco discusses the Justice Department's progress in advancing the fight against corporate crime, including its work to cement a firm foundation for corporate criminal enforcement and reward investments in corporate compliance.

(DATE: MARCH 2, 2023)

Bingham: Speech on Risk Culture to the Financial Services Assurance Forum

Australian Prudential Regulation Authority General Manager of Governance, Culture, Remuneration and Accountability Stuart Bingham discusses why a strong risk culture is important to prudential soundness and financial success.

(DATE: NOVEMBER 24, 2022)

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Industry Resources

Financial Markets Standards Board: Spotlight Review on Conduct & Culture Management Information

Research from the Financial Markets Standards Board (FMSB) examines the current practice of 24 major financial firms around management information on conduct and culture. The findings of their Spotlight Review paper suggest good progress on reducing misconduct and a shift in attention to non-financial risks and broader cultural change across firms.

(DATE: JULY 24, 2023)

Financial Markets Standards Board: Market Misconduct Through the Ages

This study looks at examples of misconduct to help market practitioners learn lessons from history and to give insights to the steps firms can take to help prevent those behaviors from occurring in a changing environment.

(DATE: MAY 2022)

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Academic Resources

City University of London: Understanding Best Practice in Industry Self-Regulation

This interview-based study of the Financial Services Culture Board (FSCB) informs discussions about the legacy of the organization by examining its most impactful activities, the cultural changes taking place among member firms, and its best practices and most valuable features.

(DATE: MAY 9, 2023)

Harvard University: Sociological Perspectives on the Bank Failures of 2023

Harvard University’s Department of History held a webinar which examined the March bank failures through a social sciences lens.

(DATE: APRIL 19, 2023)

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OFFICIAL SECTOR RESOURCES

European Central Bank: Effective Management Bodies–The Bedrock of Well-Run Banks

In this blog post, European Central Bank Executive Board Member Frank Elderson discusses management body effectiveness, and the crucial role a firm’s board plays in constructively challenging existing perspectives.

(DATE: JULY 20, 2023)

Office of the Comptroller of the Currency: Proposed Consumer Trust in Banking Survey

The Office of the Comptroller of the Currency (OCC) is requesting information and public comment on a proposed annual survey that would track and assess consumer trust in banks and banking supervision over time.

(DATE: JUNE 9, 2023)

NYS Dept. of Financial Services: Proposed Regulatory Guidance on Character and Fitness Assessments

The New York State Department of Financial Services issued a proposal to notify financial institutions of the Department’s updated expectations regarding their review and assessment of the character and fitness of their directors and senior officers.

(DATE: MAY 9, 2023)

Department of Justice: Pilot Program on Compensation Incentives and Clawbacks

The Department of Justice launched a three-year pilot program on compensation incentives and clawbacks designed to shift the burden of corporate wrongdoing away from shareholders and onto those directly responsible.

(DATE: MARCH 3, 2023)

Department of Justice: U.S. Attorney’s Offices’ Voluntary Self-Disclosure Policy

The Department of Justice implemented a new Voluntary Self-Disclosure Policy which details the circumstances under which a company will be considered to have made a voluntary self-disclosure of misconduct to a United States Attorney’s Office.

(DATE: FEBRUARY 22, 2023)

European Central Bank: Strong Risk Culture—Sound Banks

This newsletter provides an update on the European Central Bank-Single Supervisory Mechanism's approach to risk culture supervision. It also details practices observed through governance reviews over the past few years in the areas of Board challenge, remuneration schemes, and risk accountability and ownership.

(DATE: FEBRUARY 15, 2023)

Office of the Superintendent of Financial Institutions: Culture and Behaviour Risk Guideline

This draft guideline from Canada's Office of the Superintendent of Financial Institutions sets principles-based expectations for Federally Regulated Financial Institutions (FRFIs) to oversee their culture and assess the impact of behavioral patterns to effectively manage the associated risks. Finalized guidance is expected by the end of 2023.

(DATE: FEBRUARY 2023)

De Nederlandsche Bank: Moving From Reflex to Reflection

This article provides a round-up of common behavior patterns and developments in behavior and culture that De Nederlandsche Bank found at banks it supervises from 2015 to the present.

(DATE: JANUARY 2023)

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About This Initiative

The New York Fed's Governance & Culture Reform initiative is designed to foster discussion about corporate governance and the reform of culture and behavior in the financial services industry.

The Path Ahead

“The journey toward reforming culture in the banking and financial services industry is a long one. And there’s no single action that a regulator or a bank can take to make it happen. Getting it right is going to require the will and expertise of regulators, financial services firms, academics, and practitioners. And while changing organizational culture is a long-term, complex, and challenging task, I’m optimistic that we can and we will make progress. And the Federal Reserve Bank of New York is committed to being a partner on that journey.”

-- New York Fed President and CEO John C. Williams, “Banking Culture: The Path Ahead” (June 2019)

Disclaimer

Except where expressly indicated, none of these materials necessarily represent the views of the New York Fed or any other part of the Federal Reserve System.

The Teller Window

For additional information on the New York Fed’s Governance & Culture Reform initiative, see The Teller Window.

The Education and Industry Forum

The New York Fed’s Education and Industry Forum (EIF) brings together representatives from business schools and senior industry professionals to integrate ethical decision-making into the education of the next generation of the financial services workforce.

Contacts

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Governance & Culture Reform

Five Messages from the 2023 Governance and Culture Reform Conference

2023 Governance and Culture Reform Conference

Hennessy: Culture and Conduct: Key Learnings and the Year Ahead from the New York Fed

Podcast: Trust, Technology, and The New Workplace

The New York Fed’s Governance and Culture Reform Initiative: An Overview

Full Resource List