Last week, the Australian Financial Review reported that the Reserve Bank of Australia (RBA) had warned the Australian Stock Exchange (ASX) that it had "lost confidence" in the exchange less than three months before a major settlement system outage.
In a letter sent to ASX CEO Helen Lofthouse in late September 2024, RBA Assistant Governor Brad Jones pointed to an "entrenched culture" that regarded required risk management reforms "as a reactive and narrow compliance exercise." On Friday, December 20th, the ASX's equities settlement system failed, preventing trades initiated two days prior from being settled. The settlements were pushed to the following Monday morning after teams worked throughout the weekend to restart the system.
"The ASX needs to significantly uplift its risk management culture," Jones wrote. “Over time, the bank has steadily lost confidence in ASX's ability to proactively manage its operations and risks in a manner commensurate with the bank's expectations.”
In a recent Weekend Reading article, Starling Founder & CEO Stephen Scott points to why firms like ASX continue to struggle with culture issues and how developing a more proactive Culture Risk Governance capability is essential.
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