“Trust is confidence you have that other people will do the things they’ve committed to do,” Francis Fukuyama observes in the preamble to this report. In monetary policy, we’ve known for a long time that policy works best when it is both understood and trusted. The public must believe that our actions today are consistent with our objectives for tomorrow. The same logic holds for financial supervision. It works best when it is clearly described and predictably applied, when supervisory discretion is seen as disciplined and outcomes as legitimate.
This year’s Starling Compendium turns its attention to that challenge. It highlights a growing consensus: that culture and conduct are not reputational side concerns — they are core risk variables. They determine how risk accumulates, how it is understood and managed internally, how it manifests externally, and how it is governed and supervised effectively through time.
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