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Contributions to the Supervisors on Supervision Stocktake
Why have some jurisdictions invested in and leaned into culture supervision while others have not?
3.1.1a Several participants noted that many of supervisory agencies have typically increased their culture risk supervision efforts in response to some crisis.
“Ten years ago, in the wake of the 2008 financial banking crisis, I had the privilege of sitting on the UK’s Parliamentary Commission on Banking Standards as part of a cross-party body to take evidence on the fundamental causes of the crisis especially the breakdown in banking culture, and to recommend changes that would prevent similar failures again.
The evidence was frankly shocking — failures of management, failures of supervision, failures in culture. The many good people in banking either felt unable or feared to question. The tone from the top of banking institutions favoured risk and short-term profit maximisation. The supervisors not only lacked powers but often behaved with deference.”