In a speech delivered at the Eurofi Financial Forum in Copenhagen last week, Martin Moloney, Deputy Secretary General of the Financial Stability Board, argued that, if supervisors hope to be effective within the EU's complex structures, they would do well to focus on culture.
Moloney emphasized that successful supervision rests on two key ideas. First, the deterrent effect of potential compliance checks. And second, the motivation of firms to manage their own risks, with supervisors assessing and reinforcing those efforts. "Both goals need to be attended to in good supervisory practice," he said. "But you are winning when you are promoting good risk culture and you are in some difficulty when you are forced to focus on checking compliance."
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