Tag Archives: Culture

The Commitment That Banks Must Make For A Better Future

The following is the seventh and final article in a series on bank risk culture. The previous articles can be accessed here or by clicking the HOME tab on the blog.

A total meltdown in any industry requires nothing less than a total rethink of the way forward. However, rather than finding themselves engaged in a total rethink of the how and why they must transform their business, banks have been engaged in responding to more legislation and regulation as well as improving their governance and internal controls.

The problem for banks is that neither governments nor regulators can create a better future with great institutions—only bankers themselves can. Continue reading

Banks Have Arrived At A Gazpacho Moment

A few years ago, I went to a reunion of my Cass Business School MBA class. Immediately on seeing me, one of my former classmates started laughing. I was, of course, puzzled and asked him what was so funny. He apologized for his outburst but confessed that, in the past several years, he had, on several different occasions, taken great pleasure in telling some of his friends a joke about me.

I will share that joke with you. Continue reading

Outdated technology could lead to another crisis in banking

This blog has maintained that the lack of proper IT and systems is a major concern for the banking industry. Here is the proof, if indeed any was needed, from the pages of the FT.

Outdated technology could lead to another crisis in banking

The FT goes even further and suggests that the failure of such systems could lead to both a financial and social crisis.

This is why I have always believed that the most important response to the problems within the banking industry is not what governments and regulators can do but what bankers themselves can achieve. Governments and regulators should take heed. IT systems are a major source of risk within banks which no amount of legislation and regulation can remedy.

This is also another example of why focusing solely on the risk culture of banks is simply not good enough–as has been clearly demonstrated in the series of articles on the blog.

Jonathan Ledwidge is the author of the book Clearing The Bull, The Financial Crisis And Why Banks Need A Human Transformation (iUniverse).

Bank Risk Culture: An Alternative View On The Causes Of The Last Financial Crisis

The following is the sixth in a series of articles on bank risk culture. The previous articles can be accessed here or by clicking the HOME tab on the blog.

A total meltdown in any system requires nothing less than a total rethink of the way forward.

Legislators and regulators have blamed the subprime financial crisis on a whole host of issues including derivatives, proprietary trading, deregulation, the collapse of Glass Steagall and the integration of retail and investment banking, as well as the overall failure of risk management and corporate governance. What we have learned so far in this series of articles is that the actual reasons are somewhat different as they relate to the overall culture of banking. Continue reading

Bank Risk Culture: Why Leadership At The Top Is Single Biggest Source Of Risk

The following is the fifth in a series of articles on bank risk culture. The previous articles can be accessed here or by clicking the HOME tab on the blog.

No discussion of risk and culture is complete without examining the role of leadership in defining both. This week’s article will demonstrate that poor leadership is the single biggest source of risk to an institution. It is also a source of risk which no amount of risk management or focus on risk culture can overcome. Continue reading

Bank Risk Culture: Now For Something Completely Different

The following is the fourth in a series of articles on bank risk culture. The previous articles can be accessed here or by clicking the HOME tab on the blog.

Thus far in this series on bank risk culture we are beginning to understand that there is really no such thing as a separate bank or organisational risk culture and that cultural change cannot be invoked by merely adding more rules and regulations. Continue reading

Why Focusing On Bank Risk Culture Is Meaningless

The following is the third in a series of articles on bank risk culture. The previous articles can be accessed on the blog here.

In the previous articles we argued that it is futile if not impossible to separate the risk culture of an institution from the other aspects of culture within it. This article further develops this assertion by looking at some very specific examples of how banks got into trouble during the subprime crisis and why, in each case, only focusing on risk culture would have been totally inadequate.

In a January 2009, The Economist wrote an article on Citigroup entitled “A House Built on Sandy”, a less than veiled reference to the bank’s former CEO Sandy Weill and its troubles during the financial crisis. The article did not pull any punches and here are just a few of the statements it made: Continue reading

Important Lessons In Understanding The Risk Culture In Banks

The following is the second in a series of articles on bank risk culture. The previous article can be accessed here.

The subject of the risk culture in banks is all the rage these days and experts and academics of every hue and stripe have opined on the subject and given their views. A 2012 report by Ernst & Young entitled; Progress in financial services risk management: A survey of major financial institutions, states the following:

“Culture is a critical area of management focus, particularly for firms most severely impacted by the 2009 crisis. Strengthening risk roles and responsibilities, enhancing communication and training, and reinforcing accountability were the key initiatives reported to strengthen risk culture. Making risk “everyone’s business” throughout the organization is an ongoing effort.” Continue reading

Banks, Governments And Regulators Must Define Culture Before They Can Change It

Changing the culture of banks is a difficult task. However, given that the parties involved in making that change; banks, governments and regulators, are yet to define what it is they are trying to change, it makes their task not only difficult but practically impossible. Continue reading

Clearing The Bull Part 3 – Why Banks Need A Human Transformation

Banker and author Jonathan Ledwidge addresses the City Book Fair in London and providers an insider’s view on why banks must make a human transformation as well as the specifics on how they can achieve it.

Watch Part 3 on youtube using this link http://youtu.be/L99b0ZZsUbc

and

Watch Part 2 – Why Banks Are Still In Trouble on youtube with this link http://youtu.be/cnsCbMuWYQc

Watch Part 1 – Ending 30 Years Of Banking Failure on youtube with this link http://youtu.be/evrheDydfto