The constant reports of misconduct highlights how banks and their supervisors are still struggling to get to grips with corporate culture and conduct. On corporate culture, the challenge includes questions around what is culture, where does it need to improve, and how its impact can be measured. Many of these issues are equally relevant to other financial institutions, not just banks.
In this latest edition of Evolving Banking Regulation, we focus on the commercial and regulatory pressures affecting banks in the conduct and culture space. The commercial pressures include the need to rebuild reputation and trust, to establish commercial benefits from taking a more customer-centric approach, to respond to growing competition from non-banks and from other banks; and to avoid or mitigate the financial costs of misconduct.
The regulatory pressures arise from the magnitude of regulatory change in both retail and wholesale markets, some of which has been implemented but much of which is still under development, and from supervisors beginning to ask questions about the corporate culture of financial institutions.
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