A Starling Insights Deeper Dive Report

Supervisors on Supervision

— Chapter Four At-A-Glance —

Signals | Shared observations across stocktake participants

• Strong foundations: challenges in culture risk governance and supervision require sustained attention; coordinated approaches among policymakers and standard setters is key.
• Innovation mindset: innovation requires new mindsets; supervisory culture must adapt to embrace innovation and risk-taking; this will necessitate a willingness to experiment and fail.
• Global coordination: collaboration among public and private entities is essential; global standard setting agencies should seek to facilitate this collaboration across borders.
• What follows: supervisory judgments regarding culture must rest on shared indicators and peer-relative benchmarking, so the exercise of discretion is explainable, proportionate, and comparable.

Stakes | Observed consequences of the status quo

• Evidentiary basis: absent a common evidentiary basis for what constitutes ‘good’ culture, culture risk governance and supervision will continue to be perceived as ‘soft’ and ‘non-quantifiable’ concerns.
• Better solutions: lasting change requires training, metrics, and new structures; new rules, regulations, and policies will not be sufficient. New practices are needed and these demand a new mindset.
• Collaboration: without global leadership to raise standards, develop best practices, and encourage broader adoption of such, efforts to drive meaningful change will flounder; arbitrage exacerbated.
• What follows: shift from policy to practice; agree a common evidentiary core, equip supervisors (skills + tools), and coordinate cross-border application to improve standards and pre-empt arbitrage.

Summons | Opportunities and challenges to take up

• Examiners: build a foundation to support change, which must include attention to both structural (legal frameworks) and cultural (innovation mindset) factors. 
• Boards & Executives: recognize opportunity to achieve greater clarity and more focused supervision; collaborate with the regulatory community on areas of mutual interest.
• Policymakers: encourage regulatory approaches that address culture-relevant risks; facilitate for experimentation and innovation among firms and supervisors alike.
• Standard‑setters & international bodies: pursue coherence, not uniformity; establish shared vocabulary and common evidentiary bases that travel across borders and agencies; share learnings.
• What follows: time-box a public-private methods program; pilot a minimal evidence core and coordinated horizontal reviews; publish comparability templates with due-process safeguards.