Banks told to clamp down on toxic culture
The world’s leading banking standards-setter has called for a purge on toxic corporate cultures as crisis-hit lenders count the cost for a string of scandals.
Carolyn Rogers, secretary general of the Basel Committee on Banking Supervision, said it was time to step up efforts to tackle persistent culture problems after regulators first moved to repair bank balance sheets following the financial crisis.
She warned that the risk from toxic corporate cultures is “very significant” if left unaddressed and could, at its worst, trigger “large scale failures”.
Her comments come as banks face large losses caused by the collapses of Archegos Capital, Bill Hwang’s family office, and Greensill Capital, the supply chain lender.
Banks have also been in the spotlight over extreme working hours, risky behaviour and a lack of diversity.
Ms Rogers said: “This is a topic that bank supervisors and banks themselves actually need to focus on over the next few years.
“We still see scandals, we still see billions of dollars in fines levied on banks for various, what I would call, cultural failings or misconduct risk.”
She said regulators are not starting with a “blank sheet of paper” but warned “there’s still a pretty clear indication that there’s room to improve”.