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
Posted in Banking, Business, People
Tagged Banks, Business, Culture, economy, Financial Crisis, FSA, Governance, people, Regulator, Risk, Risk Management
We can never legislate or regulate our way to sustainable banking—the industry needs to adopt a new strategic business model
Déjà vu All Over Again
“They came on in the same old way and we sent then back in the same old way”.
They were the words the Duke of Wellington used to describe the repeated and futile attempts by Napoleon’s Grand Armée to break through the British defenses at Waterloo.
They can equally be used to describe the current prescriptions for the subprime crisis.
We remain mired in the unenviable position where those who know about banking are firmly wedded to the same old solutions, while those who don’t know about banking i.e. some in the mass media and certain politicians, resort to populist rhetoric. Sadly, the debate on the subprime crisis has generated more heat than light.
It is time for something different. However, before we move forward with a new prescription we need to better define the problem.
Posted in Banking
Tagged Audit, Bank of England, banking, Clearing The Bull, Credit, Dick Fuld, Federal Reserve, Finance, Financial Crisis, Fred Goodwin, FSA, Investment Banking, Junk Bonds, LDC Debt, Legislation, Regulations, Risk, Risk Management, SEC, SOX, Subprime