1 00118601 Emerging themes 2019 A4 AW v31 combined - Page 78



GOVERNANCE
IN THE SHADOW
OF THE FINANCIAL
CRISIS
A DECADE ON, WHY DOES THE
ISSUE OF CULTURE STILL PERSIST?
Since the financial crisis hit in 2007/8 there has
been considerable regulatory focus on culture
within financial services. High profile scandals,
including the manipulation of benchmark
rates by traders at major banks, served to
increase focus on efforts to drive cultural
and behavioural change, spurred on by the
damning findings of the UK Parliamentary
Commission on Banking Standards (PCBS) in
2013 which concluded that “Banking culture
has all too often been characterised by an
absence of any sense of duty to the customer
and a similar absence of any sense of collective
responsibility to uphold the reputation of the
industry”. But, over a decade on since the
financial crisis, why does the issue of culture
still persist and what does the future hold?
78/
Rule-based change
Until recently, the regulatory response had largely been
focused on addressing the remuneration structures that
were seen to have incentivised the risk-taking and poor
behaviour viewed as partly to blame for the financial
crisis, and ensuring that senior executives in financial
institutions are held properly to account.
In January 2010, the then FSA’s original Remuneration
Code came into effect and required the UK’s largest
banks, building societies and broker dealers to ensure
that their remuneration policies, practises and
procedures were consistent with, and promoted,
effective risk management. This Code has been through
various incarnations and extensions, and now exists
in seven Remuneration Codes, with the main rules
contained in the FCA Handbook and PRA Rulebook.

Paperturn



Powered by


Full screen Click to read
Paperturn flip book
Search
Overview
Download as PDF
Print
Shopping cart
Full screen
Exit full screen