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Governance & Culture Reform

New York Fed

Speeches

Stiroh: Reform of Culture in Finance from Multiple Perspectives

In remarks at the GARP Risk Convention, EVP Kevin Stiroh identified misconduct risk as a major consideration for firms and discussed culture from the perspective of boards of directors, senior management, industry groups, and the official sector. He also discussed the idea of “cultural capital,” an intangible asset that impacts what a firm produces and how it operates.

(DATE: FEBRUARY 26, 2019)

Williams: Now is the Time for Banking Culture Reform

In remarks at the Governance and Culture Reform Conference, President John C. Williams discussed the need to stay vigilant when it comes to culture, even in rosy times. A strong culture and robust corporate governance are the first lines of defense, critical in protecting people, the banks, and the economy from risk, scandal, and harm.

(DATE: JUNE 18, 2018)

Held: The Evolving First Line of Defense

In keynote remarks at the 1LoD Summit, Michael Held, General Counsel, focused on the role of the first line of defense: discussing the risk of silos in the three lines of defense mode; encouraging a more creative and inclusive approach; and offering thoughts on the development of professional attributes.

(DATE: APRIL 17, 2018)

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Publications

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

In this Harvard Business Review article, Executive Vice President Kevin Stiroh discusses the role culture plays in corporate misconduct, and shares his perspective on why 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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Events

Workshop on Culture Measurment and Assesment

The New York Fed hosted a workshop for industry practitioners focused on measuring and assessing culture and behavior within and across financial firms.

(DATE: JUNE 21, 2017)

Reforming Culture and Behavior in the Financial Services Industry: Expanding the Dialogue

The New York Fed hosted a one-day workshop examining culture and behavior in the financial services industry, expanding the dialogue to include the perspectives of institutional investors and financial institution supervisors, discuss methods of culture assessment, and explore the influence of technology on culture.

(DATE: OCTOBER 20, 2016)

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Other Resources

Speeches

Woolard: Opening Up and Speaking Out: Diversity in Financial Services and The Challenge to be Met

Woolard suggests that how a firm approaches diversity and inclusion tells us a lot about its culture. However, while things are moving in the right direction, progress has been slow.

(DATE: DECEMBER 19, 2018 | SOURCE: FINANCIAL CONDUCT AUTHORITY)

Clayton: Observations on Culture at Financial Institutions and the SEC

In a speech at Reforming Culture and Behavior in the Financial Services Industry: Progress, Challenges, and the Next Generation of Leaders, Jay Clayton, SEC Chairman, spoke on the importance of developing, improving and reinforcing positive culture in financial institutions.

(DATE: JUNE 18, 2018 | SOURCE: U.S. SECURITIES AND EXCHANGE COMMISSION)

Byres: The Incentive to Fly Safely

In his regulatory address at the AFR Banking & Wealth Summit in Sydney, Wayne Byres, APRA Chairman, focused on incentives and accountability in the financial sector.

(DATE: APRIL 4, 2018 | SOURCE: AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY)

Bailey: Transforming Culture in Financial Services

In a speech in London, Andrew Bailey, Chief Executive, Financial Conduct Authority, focused his remarks on understanding the drivers of poor conduct, developments of recent years, and the importance of good diversity in the workplace.

(DATE: MARCH 19, 2018 | SOURCE: FINANCIAL CONDUCT AUTHORITY)

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Industry Publications

Group of 30: Banking Conduct and Culture: A Permanent Mindset Change

In their latest report, the G30 focuses on two fundamental questions:

How much progress has the banking industry made in conduct and culture 10 years on from the global financial crisis; and
In what areas should banks continue to press on, and what evolving questions should they be mindful of going forward?

(DATE: November 2018 | SOURCE: Group of Thirty)

FMSB publishes new financial markets misconduct research

The FICC Markets Standards Board (FMSB) published a Behavioural Cluster Analysis study that reviewed the behavioural patterns in 390 cases of misconduct over an extended period of time, covering 26 countries and multiple asset classes.

(DATE: JULY 2018 | SOURCE: FMSB)

U.K. Banking Standards Board: 2017/2018 Annual Review

The Banking Standards Board (BSB) published its 2017/2018 Annual Review, which is a result of the largest ever survey of behavior, competence and culture in U.K. banking. The report paints a picture of the banking sector based on the views of more than 36,000 people working in 25 banks and building societies and gives an overview of the BSB's work over the past 12 months.

(Date: March 2018 | Source: Banking Standards Board)

U.K. Banking Standard Board: Annual Review 2016/2017

The Banking Standards Board (BSB) annual review paints a picture of the banking sector based on the views of more than 28,000 people working in banks and building societies across the U.K. The BSB welcomed the engagement of a diverse range of firms, all keen to learn more about managing their own organizational culture.

(DATE: MARCH 2017 | SOURCE: BANKING STANDARDS BOARD)

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OFFICIAL SECTOR PUBLICATIONS

Australian Prudential Regulation Authority: Final Report on Inquiry into the CBA

The Australian Prudential Regulation Authority (APRA) released the Final Report of the Prudential Inquiry into the Commonwealth Bank of Australia (CBA).

(DATE: MAY 2018| SOURCE: AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY)

Financial Stability Board: Stocktake of Efforts to Strengthen Governance Frameworks

The Financial Stability Board (FSB) published a report on efforts being undertaken by international bodies, national regulators, industry associations and firms on developing the use of governance frameworks to address misconduct risk.

(DATE: MAY 2017 | SOURCE: FINANCIAL STABILITY BOARD)

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About This Page

This page is designed to foster discussion about corporate governance and the reform of culture and behavior in the financial services industry.

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.

Submit suggestions, comments, and resources for consideration.

Governance & Culture Reform

Hennessy: We’re Only Human: Culture and Change Management

Building Cultural Capital in the Financial Services Industry: Emerging Practices, Risks and Opportunities

Williams: Banking Culture—The Path Ahead

Group of 30: Banking Conduct and Culture: A Permanent Mindset Change

Financial Conduct Authority: 'Progress and challenges' 5 Conduct Questions

Full Resource List