In a just-released article in The Wall Street Journal, journalist Rebecca Ballhaus reports on allegations of a “toxic atmosphere” — rife with partying, harassment, and discrimination — at the US Federal Deposit Insurance Corporation (FDIC), citing interviews with more than 100 current and former employees.
Many female bank examiners have left the FDIC because of a work environment they described as a sexualized "boys club," according to the former employees. They also allege that women were given fewer opportunities for advancement.
In 2020, the FDIC's inspector general found that the agency's policies regarding sexual harassment fell short and that its processes for tracking misconduct allegations were "decentralized, untimely, incomplete, and inaccurate." The FDIC agreed to make changes at the time, but disagreed with the inspector general's conclusions that its programs were inadequate.
However, reports of problems with the agency's work environment go back more than a decade, and the presence of a culture of heavy drinking and partying among examiners is well-known. "Current and former employees across the country described a pernicious culture for staff in the FDIC's regional offices exacerbated by the relative freedom of bank examiners traveling for days or weeks at a time," Ballhaus writes. "Some called life on the road the 'Wild West.'"
In the coming weeks, Starling will publish a Deeper Dive report entitled "Physician, Heal Thyself," which will discuss the global push to hold regulators accountable for their organizational culture and the outcomes such culture may drive. Regulators, that is, are increasingly being held to a standard regarding culture and conduct that they have emphasized in recent years among the firms they oversee. This Deeper Dive will only be available here on Starling Insights.