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Governance & Culture Reform

New York Fed

In a keynote address at the Annual Culture and Conduct Forum for the Financial Services Industry, SVP James Hennessy provides an update on the culture initiative and thoughts on psychological safety, a topic that the COVID–19 pandemic has underscored as a key element of a well-functioning workplace culture.

(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)

Williams: Banking Culture: The Path Ahead

In welcoming remarks at the New York Fed's fifth conference on culture in financial services, Building Cultural Capital in the Financial Services Industry: Emerging Practices, Risks and Opportunities, President John C. Williams, discussed what can be done to improve culture in financial services.

(DATE: JUNE 4, 2019)

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)

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Publications

Bank Culture and the Official Sector: A Spectrum of Options

Culture is a topic of growing interest in financial services. This Article 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, 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

Culture Diagnosis and Behavior Change—Learnings from the Field

As part of its initiative to spur reform of culture and conduct in the financial services industry and encourage the industry to raise standards, the Federal Reserve Bank of New York hosted a series of web events in 2020-2021.

(DATE: SEPTEMBER 27, 2021)

Culture in a Post-Pandemic Workplace

As part of its initiative to spur reform of culture and conduct in the financial services industry and encourage the industry to raise standards, the Bank is hosting a series of web events.

(DATE: July 16, 2021)

New York Fed Web Series on Culture: Purpose and the Employee as Stakeholder

In our fourth webinar of the series, panelists discussed the role of organizational purpose in building healthy cultures; the ways in which the rise of employee activism affects organizational culture; and increased demand for corporations to engage on contemporary social issues and engage with a broader group of stakeholders.

(DATE: May 06, 2021)

Diversity, Equity & Inclusion and Culture

As part of its initiative to spur reform of culture and conduct in the financial services industry and encourage the industry to raise standards, the Bank is hosting a series of web events. Our recent webinar focused on the links between Diversity, Equity & Inclusion and Culture.

(DATE: MAY 1, 2021)

Understanding Behavioral Risks

In this pair of webinars, Jim Hennessy moderates a discussion among financial sector practitioners examining how they identify and mitigate behavioral risks in their

(DATE: JULY 2021)

Trust & Decision Making

In this event on trust and decision-making, panelists offered diverse perspectives from neuroscience, behavioral science, financial services, technology, and space flight to help us better understand how trust and habits of decision-making affect organizational culture and outcomes. The discussion covered the formation and erosion of trust in colleagues, employers and systems, and considered links between trust and decision-making.

(DATE: DECEMBER 2, 2020)

Partnerships in Building Ethical Norms: Governance & Culture Reform in the Financial Services

The webinar highlighted two initiatives in which the New York Fed has worked with the industry to promote ethical norms: the Education and Industry Forum’s case studies, which present ethical dilemmas faced by junior employees in financial firms, and the FX Global Code, a set of principles for participants in the international foreign exchange market published in 2017.

(DATE: OCTOBER 19, 2020)

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

This conference provided a multi-disciplinary view on persistent misconduct in the financial industry and highlighted the effects of societal changes and new technologies on culture within firms.

(DATE: JUNE 4, 2019)

Reforming Culture and Behavior in the Financial Services Industry: Progress and Challenges

Reforming Culture and Behavior in the Financial Services Industry: Progress, Challenges, and the Next Generation of Leaders

(DATE: JUNE 18, 2018)

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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

Hong Kong Monetary Authority

Focused review on incentive systems of front offices in retail banks.

(DATE: NOVEMBER 2021 | SOURCE: HONG KONG MONETARY AUTHORITY)

Bank of England Working Paper on Organizational Culture and Bank Risk

The Bank of England released this working paper linking indicators of poor culture to higher risk outcomes.

(DATE: MARCH 2021 | SOURCE: BANK OF ENGLAND)

Australian Prudential Regulation Authority: Information Paper Outlining GCRA Approach

The Australian Prudential Regulation Authority (APRA) shared its plans to scale up significantly its efforts to lift standards of governance, culture, remuneration and accountability (GCRA) across the industries it regulates.

(DATE: NOVEMBER 2019 | SOURCE: AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY)

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 Conduct Authority: Transforming Culture in Financial Services Discussion Paper

The FCA published a discussion paper that includes a set of essays that discuss what a good culture might look like, the role of regulation and regulators, how firms might go beyond incentives, and how to change behaviour for the better.

(DATE: MARCH 12, 2018 | SOURCE: FINANCIAL CONDUCT 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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This page is designed to foster discussion about corporate governance and the reform of culture and behavior in the financial services industry.

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Governance & Culture Reform

Culture Web Series: Trust in Banks, Where Are We Now?

Dechario: Lessons on Culture: A Year in Review

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

Podcast: Norms, Mindsets, and Decision-Making

Culture Web Series: Culture Diagnosis and Behavior Change

Full Resource List