- Regulation of banks — Investment business
This chapter looks at the role of ethics and culture in the financial services industry as determinants of either good or bad behaviour. Because banks are run by human beings, one should know first how to fix people’s behaviour if one wants to understand how to fix banks. Therefore, governance models should be rather analysed with a focus on the organizational and cultural aspects of institutions. A proactive inclusion of cultural and ethical issues in banking supervision has been accomplished by the De Nederlandsche Bank (DNB), which was in 2010 the first banking supervisor globally to treat culture and behaviour as risk factors in supervision. At EU level, the European Banking Authority (EBA) Guidelines on common procedures and methodologies for the supervisory review and evaluation process (SREP) make reference to culture and ethics in banks.