It began with APRA’s Wayne Byres two weeks ago. His speech highlighted the importance of culture. It concludes as follows: “An increasing proportion of supervisory attention is therefore being directed to making assessments of organisational culture. The international community of supervisors is still grappling with how best to do this, and how to respond when a culture is shown to be in need of improvement.”
Little did Byres know of what would unfold.
Then later this week my manager noticed this FED announcement for a conference with the title: “Economics of Culture: Balancing Norms against Rules.” With surprising naiveté, the announcement mentions this: “Critics question whether there is a culture problem in the financial services industry … ”
The conference pushes the credibility envelope: It is a long-standing tradition to exclude financial institutions from research samples. Many academics, in their drive to publish at their convenience and not dirty their hands, avoid banks. Now, in a time of relative economic calm, they vouch to take that look.
But, the deeper meaning of the conference title became more clear as the week progressed …
… my favourite pod-cast, This American Life, well known from radio documentaries on the financial crisis, hit it with the Segarra tapes. The pod-cast highlights the lack of action taken on a highly confidential report commissioned by New York Fed president Bill Dudley. This report, written by Columbia professor David Beim, identified why the regulator failed in the years leading up to the crisis. Apparently, the report did not lead to corrective action.
The pod-cast is now going viral: Elizabeth Warren calls for hearings on the allegations and the FED in denial.
Expect more on culture in the next weeks to come. I mean, why would the culture at the FED be unique?
This Amercian Life’s on the financial crisis: