Strong and Effective Supervision of Governance and Culture

Like many in today’s financial regulatory community, my formative experience as a regulator came in the Global Financial Crisis and its aftermath. As a corporate lawyer working in the UK, I found myself supporting the Bank of England in its contingency planning for possible bank failures. There wasn’t much time for reflection. When you’re working on plans to prevent possible depositor panic and loss of confidence in the banking system, you don’t have time to pause and dissect the root causes. 

Time to reflect “at leisure” has been in short supply since then, as my career took me into the Bank of England’s resolution unit full time and later to build out the resolution function at the Australian Prudential Regulation Authority (APRA). APRA is in the relatively rare position of being both the prudential supervisor and resolution authority. In that context, and as I’ve transitioned into supervision in recent years, I’ve had to focus more on how risks to viability materialise from end to end. The single most important insight I’ve gained is the importance of asking ‘why’ — and that the earlier you askit, the better.