The conduct risks that follow from organizational culture are not typically treated as matters of prudential concern, impacting the safety and soundness of the financial system. Yet, as Credit Suisse attests, deposit flight is rapid when customers and investors lose faith in management, and this faith can be lost after persistent misconduct scandals. As such, conduct risk governance is an underappreciated prudential matter.
Observations
Jan 15, 2025In a recent hearing before the UK House of Lords Financial Services Regulation Committee, Sam Woods, Deputy Governor for Prudential Regulation at the Bank of England, announced plans to ease the regulatory burden on firms, as reported by the Financial Times.
Compendium
Jun 11, 2024by Andrea Enria
Compendium
Jun 11, 2024The spring 2023 banking turmoil confirmed the necessity of strong internal governance and risk culture within firms, beyond post-crisis regulatory reforms. Regulatory measures like increased capital and liquidity requirements set important safeguards but are insufficient without effective internal checks and balances. The focus should shift to ensuring sound risk culture and governance to prevent future crises and systemic risks.
Compendium
Jun 11, 2024by Elise Bant
Compendium
Jun 11, 2024by Stephen Scott, Randal Quarles, Margaret E. Tahyar
Compendium
Jun 11, 2024