Enhancing Financial Stability by Improving Culture in the Financial Services Industry
October 20, 2014
William C. Dudley, President and Chief Executive Officer
Remarks at the Workshop on Reforming Culture and Behavior in the Financial Services Industry, Federal Reserve Bank of New York, New York City
In recent years, there have been ongoing occurrences of serious
professional misbehavior, ethical lapses and compliance failures at
financial institutions. This has resulted in a long list of large fines
and penalties, and, to a lesser degree than I would have desired
employee dismissals and punishment. Since 2008, fines imposed on the
nation’s largest banks have far exceeded $100 billion.2
The pattern of bad behavior did not end with the financial crisis, but
continued despite the considerable public sector intervention that was
necessary to stabilize the financial system.
I reject the narrative that the current state of affairs is simply the
result of the actions of isolated rogue traders or a few bad actors
within these firms. ... That is, the problems originate from the culture of the firms, and this
culture is largely shaped by the firms’ leadership. This means that the
solution needs to originate from within the firms, from their leaders.
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