Culture and Conduct Risk: The Normalization of Deviance

# · ✸ 66 · 💬 21 · 2 years ago · www.regulationasia.com · kiyanwang · 📷
In a paper recently published by the Bank of England, he discusses the use of 'unobtrusive data' in the course of studying culture within organizations, and the conduct it promotes. Since the 2007-2009 Global Financial Crisis, Mox Bank's Wendy Ennis observed, investigations by regulators and the media into misconduct scandals at financial firms, and subsequent regulatory actions, have placed an emphasis on the personal accountability of senior leaders for setting a firm's culture and the behavioral predilections such cultures promote. Formal systems and processes for risk governance, Ennis noted, will fail to produce desired outcomes if not supported by an appropriate culture. Temasek's Lee argued that if culture is defined as the norms and values of an organization, such may be fairly seen as intangible in nature. If conduct is viewed as reflective of such norms and values, then such conduct may be taken as a highly tangible manifestation of organizational culture. Going forward, Lee argued, measuring culture will involve multiple indicators and approaches to present a more holistic view of the firm. Which summarizes trends in the supervision of culture and conduct risk among banking industry regulators and standard setters.
Culture and Conduct Risk: The Normalization of Deviance



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