A Starling Insights Deeper Dive Report
Supervisors on Supervision
— Questions and Request for Comments —
Supervisors on Supervision
— Questions and Request for Comments —
On November 17th, Starling Insights launched a new Deeper Dive report, “Supervisors on Supervision,” following on the heels of a global stocktake exercise that has convened dozens of senior-most financial sector supervisors worldwide. The study collects emerging views regarding reform efforts aimed at culture risk governance and supervision.
The report’s release as a Public Exposure Draft is intended to solicit broad feedback from industry stakeholders which will inform a Final Report to be released in the second quarter of 2026.
ACCESSING THE REPORT
On December 15th, Starling launched a fully interactive version of the report on Starling Insights, designed for easy navigation and side-by-side exploration of the curated content alongside public commentary as it is offered.
The “Supervisors on Supervision” Report
The report also continues to be available for download as a pdf by clicking on the button below.
CALL FOR COMMENTS:
Read the Formal Call for Comments
DATES:
The deadline for submitting comments is March 15th, 2026
HOW TO CONTRIBUTE:
To help us review efficiently, please:
General Comments About the Report
Email: Comments may be emailed to [email protected]
Comment Submission Form: Comment Form
Responses to Chapter Questions
Starling has offered questions to the Chapter Stocktakes. Responses to questions will also be directly incorporated into the online version of the report as they are submitted.
VIEWING COMMENTS:
Review submissions to the “Supervisors on Supervision” Public Disclosure Draft at our Comments Page.
We are humbled by the exceptional engagement we have experienced in conducting the global stocktake exercise that we report upon here. Our gratitude goes to the exceptional leadership team, advisors, and the nearly 50 supervisors, senior officials, and renowned scholars whose shared wisdom made this “Supervisors on Supervision” report possible. We particularly wish to thank the many participants who lent their time to this project to offer their frank assessments about what is working, what has not, and where opportunities exist for supervision to evolve.
This report reflects a broad stocktake of perspectives and practices, alongside curated excerpts from the Starling Insights archive. We have sought to capture frank views precisely as they were expressed — intentionally curating points of agreement and noting areas of tension — and we hope to have presented these views with clarity, balance, and respect.
Where voices diverge, we have tried to state that plainly. Our goal is not to close debate but to give it structure, so that key industry stakeholders might more readily agree about what they disagree about, in hopes that this may foster a greater ability to identify testable propositions and to explore practical, evidence-based solutions.
Culture risk governance and supervision is an evolving field, and we are under no illusion that this report represents the last word. It is for this reason that we offer this Public Exposure Draft for stakeholder community input. We therefore invite comments that:
We undertook this project with a spirit of humility, hoping that we might help to advance the cause of credible, explainable, and reliable culture risk governance and supervision, worthy of the public trust. If you find value in the work, we hope you will help us to improve upon it.
If you agree with any of the conclusions we have put forward, we hope you will offer views as to how this work may be meaningfully progressed. And if you disagree, we invite you to tell us where, why, and to offer suggestions as to how we may better our thinking about these topics.
As comments are received they will be shared on Starling Insights starting December 15th 2025.
We hope that this collective body of work will serve as a valuable public good that will inform ongoing efforts to advance culture risk governance and supervision.
A Final Report, summarizing the input received through the stocktake exercise detailed here and the additional feedback that it prompts, will be released in the second quarter of 2026.
With appreciation,
Erich Hoefer Deputy Editor, Starling Insights
1.1 Definitional Ambiguity and Supervisory Hesitancy
| 1.1 (a) | How should we define culture in a manner that demonstrates the importance of culture to the task of supervision? Does culture only matter in so much as it directly affects risk and compliance functions (commonly discussed in terms of “Risk Culture”); or is prudential relevance of culture broader than this (often discussed in terms of “Culture Risk”)? |
| 1.1 (b) | Some discuss culture in terms of “non-financial risk” or “material operational risk.” Does either formulation offer an effective framework within which to contemplate matters of culture within commonly used frameworks of supervision? |
| 1.1 (c) | What is the relationship between governance, risk management, and culture? Which is of paramount in terms of supervisory significance? Is culture to be viewed as a byproduct of formal risk and governance infrastructure, or is it better viewed as a driver of performance outcomes? Can these matters be assessed independently? If so, should culture be assessed independently of governance and risk management? Why/not? |
| 1.1 (d) | With culture defined as a matter of supervisory significance, what is the relationship (if any) between culture and a firm’s stated purpose? Its espoused values? Its ethical stance and practice? The ‘fitness & probity’ of its board and executive management? (Etc.) Are such matters also rightly viewed as being of supervisory significance? Why/why not? |
1.2 The Case for Culture as a Supervisory Concern
| 1.2 (a) | Culture is viewed by some as being of relevance to the supervision of conduct risk concerns and also as a matter of significance for prudential supervisors. Is culture to be considered differently in either context? If so, how so? Or should conduct and prudential supervisors adopt a standard approach to culture as a precursor to risk considerations more generally? |
| 1.2 (b) | Many post-mortem inquiries posit risk governance failures as having culture among their root causes. With this in view, should culture be taken to represent a source potential systemic risk? However this is answered, what implications follow? |
| 1.2 (c) | Failures in culture risk governance and supervision are pointed to by many as having worked to undermine essential public trust in the industry and its overseers. Is this fair? Why/not? |
| 1.2 (d) | To what extent is the culture of supervisory agencies themselves an important driver of the supervisory outcomes such agencies achieve? What specific examples can we point to where supervisory culture was found to have improved supervisory outcomes? What specific examples can we identify where the reverse was in clear and uncontroversial evidence |
1.3 Global Convergence and Divergence
| 1.3 (a) | What direct and indirect costs are associated with the persistence of fragmented, jurisdiction-specific approaches to and expectations for culture risk governance and supervision? What is the impact for both firms and supervisors? |
| 1.3 (b) | What benefits might result from a more coherent, globally standard approach to culture risk governance and supervision? |
| 1.3 (c) | How might international standard-setters, or some other cross-border forum, help to move us from conviction regarding culture as a matter of supervisory significance to convergence around how culture is best addressed in supervisory practice? How should we work to establish and promulgate relevant best practices? Among the practical outcomes that might follow from such a collaborative endeavor, which would be of greatest expected benefit? Why? |
1.4 Legitimacy and Trust as Supervisory Assets
| 1.4 (a) | A tension is called out through our stocktake: some value the application of experienced and nuanced supervisory judgement in the course of oversight activities, over the application of a rigid and overly prescriptive rules-based; while, on the one hand, some complain that reliance on supervisory judgement impairs the cause of transparency, consistency, and due-process. In this connection, what views do you espouse? And why? |
| 1.4 (b) | How should supervisory bodies approach challenges with regard to their own organizational cultures, with a view to enable them to exercise supervisory judgement more effectively? To what extent might the culture of a supervisory agency underpin (or undermine) its perceived legitimacy? How might this shape trust in the financial sector, and its participants? |
2.1 The cost of delay
| 2.1 (a) | With reference to the banking sector turmoil of 2023, what might be attributed to governance breakdowns, especially those related to organizational culture? |
| 2.1 (b) | What role, if any, might supervisory culture have played in connection with these events? |
| 2.1 (c) | How should supervisors approach culture risk governance as a factor in their assessment of a firm’s systems, controls, and critical risk management processes? |
| 2.1 (d) | How should supervisors view the complex interactions between formal governance structures and firm culture? Should supervisory expectations of firms’ governance evolve to ensure that culture is treated as a first-order determinant of institutional resilience? Why? And how? |
2.2 The anatomy of structured discretion.
| 2.2 (a) | How should supervisors balance establishing evidence of wrongdoing before they take action versus exercising supervisory judgement to preempt problems from happening in the first place? How does the necessary posture differ based on legal mandate and supervisory tools? |
| 2.2 (b) | How should supervisory bodies address accusations that they tend towards overreach, on the one hand, versus overly delayed action, on the other? |
| 2.2 (c) | How might supervisory bodies work to establish greater trust with regulated entities? |
2.3 Proportionate early action.
| 2.3 (a) | What steps might supervisors take to help banks to preemptively address culture risk matters before they lead to risk governance failures and enforcement actions? |
| 2.3 (b) | What tools can a supervisor use to address clear cultural failings within a regulated entity? Are Pillar 2 adjustments and liquidity add-ons (ie higher financial requirements) an adequate response to behavioural issues? If not, what supervisory tools can supervisors use to incentivize banks to address cultural matters? |
| 2.3 (c) | What is the appropriate role for enforcement in addressing culture as sitting among the root causes of risk governance failures? |
2.4 Institutional memory and accountability
| 2.4 (a) | What is needed to ground supervisory judgement operationally and to make interventions in culture related matters more explainable, consistent, and legitimate? |
3.1 Integration into supervision
| 3.1 (a) | Should supervisors embrace culture risk supervision as a means by which to prevent future crises, and how would that change how they approach supervision? What steps would you recommend that supervisory bodies take to ensure that efforts to incorporate culture risk supervision into supervisory frameworks are sustainable over time. |
| 3.1 (b) | How do structural conditions — such as legislative mandates, legal frameworks, institutional leadership, and management buy-in — shape a supervisor’s capacity to engage in culture supervision? |
3.2 Innovation in measurement
| 3.2 (a) | What mechanisms and metrics would enable agencies to embed culture risk governance and supervision into routine examination — and to demonstrate the value in doing so? |
| 3.2 (b) | What new technologies and techniques for collecting, measuring, and shaping culture should be incorporated into new supervisory practices? |
3.3 Supervisory learnings to date
| 3.3 (a) | What examples of successes in frameworks and governance processes can the industry point to in the area of culture risk governance and supervision? |
| 3.3 (b) | What has come of past supervisory approaches for improving culture, including accountability regimes, incentive structures, and tone-from-the-top? What are the limitations or blind spots inherent in these tools, and how can they be addressed? |
3.4 Re-setting institutional memory
| 3.4 (a) | How can supervisory bodies support firms in implementing effective culture risk governance? |
| 3.4 (b) | How can supervisors build the trust, challenge, and engagement with firms needed for effective culture supervision, while avoiding perceptions of regulatory capture? |
4.1 The risk of regulatory drift
| 4.1 (a) | What is needed to ensure that culture risk supervision becomes a durably embedded and routinized feature of supervisory regimes, rather than a secondary or transient concern? |
| 4.1 (b) | What structural, political, or institutional barriers have hindered progress on developing sound protocols for culture risk governance and supervision? What conditions are needed to overcome them? |
| 4.1 (c) | How can transparency in supervision be advanced in ways that protect confidentiality but also strengthen public trust, enable peer learning, and reinforce the legitimacy of culture-related interventions? |
4.2 The imperative of innovation
| 4.2 (a) | What enabling conditions can foster innovation — within supervisory bodies and among firms alike to help accelerate the development, testing, and adoption of new tools, metrics, and practices for addressing culture-driven risks? |
| 4.2 (b) | What can be done to help supervisors move promising innovations in culture risk supervision beyond pilots and into more widespread and durable practice? |
| 4.2 (c) | What barriers do firms face in evaluating, testing, and implementing new tools or innovative governance frameworks for addressing culture risk governance? |
4.3 The need for a common evidentiary basis for decision-making regarding culture
| 4.3 (a) | What kinds of tools, processes, or evidence trails might help to enable boards and executives to demonstrate credibly that a firm’s cultural dynamics are aligned with its governance structures, business model, and risk tolerance? |
| 4.3 (b) | How might the industry and supervisory bodies come together to establish a common evidentiary basis for assessing culture risk governance? |
4.4 The case for global collaboration
| 4.4 (a) | What is the ideal forum for encouraging public and private sector participants to work together in an effort to reach consensus around common approaches to culture risk governance and supervision? What factors need to be in place to support success in that direction? |
| 4.4 (b) | Who should take responsibility for leading international collaboration on culture risk governance and supervision, and what kind of mandate or structure would give such leadership legitimacy? |
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