Global watchdog tells banks to work on culture towards risks

Tim Wallace
Follow Tim
BANK bosses should set the tone towards risk-taking in their firms and make sure all staff stick to it, the Financial Stability Board (FSB) said yesterday.

The group of international regulators is concerned that senior managers say the right things on risk-taking but that the culture among staff overall is not cohesive enough to stick to those targets.

It wants watchdogs in each country to make sure banks’ bosses set out clear policies and the right attitude towards risk and enforce it at every level of their organisations – as well as leading by their own example.

Making sure the culture meets managers’ expectations includes paying staff to meet those risk targets, the FSB said.

National regulators should understand the culture bosses are trying to set, and report back to management any actions that show the culture is not fully embedded in the company, it said.

If that still does not work, the watchdogs may need to discipline the bank, under the new guidelines.