Tag Archives: Regulator

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

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Is The Romney Denial On Bain A Case Study In Corporate Governance?

Mitt Romney has stated that he left Bain Capital in 1999 and had nothing to do with the company after that. However, regulatory filings tell a different story. Is there a corporate governance lesson here?

The Presidential election debate in the US between Obama and Romney has for the past several weeks centered on the latter’s involvement in Bain Capital. The questions that have arisen relate to the actual period during which Romney served at Bain including the precise timing of his departure and therefore by definition what actions of that private equity firm could he or should he be made accountable for.

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Banks Need To Carefully Reconsider Their Approach To Lobbying

History shows that lobbying is extremely counterproductive but it does not appear that banks have learned their lesson.

Lobbying is a permanent feature of the US political and regulatory scene. All industries participate and engage in it but some more than others. The question is, are these industries better off as a result of the often aggressive lobbying of the Congress and regulators? Does lobbying add value to an organization or industry?

The omens are not good.

During the 2000s a very curious thing happened. Three of the biggest industry lobbying groups experienced outcomes that would have been completely at odds with their business objectives. They were the oil industry, the auto industry and the banks.

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