Written by: Michael Cole-Fontayn | EMEA Chairman, BNY Mellon
This afternoon, I will be participating in a panel discussion at the British Banking Associations’ Annual International Banking Conference on culture and conduct in global markets.
As the title of the session makes clear, this is not fundamentally a discussion about individual pieces of regulation; nor is it a specifically a UK discussion, even though two important initiatives, the Fair and Effective Markets Review (FEMR) and the Senior Managers Regime (SMR), are specific to the UK market. This is a discussion about culture, conduct and governance within global financial services companies.
Culture is very important, and we as an industry need to get it right. As former FCA Adviser Clive Adamson, wisely noted a few years ago, “Culture is like DNA. It shapes judgment, ethics and behaviors displayed at those key moments, big or small, that matter to the performance and reputation of firms and the service that it provides to customers and clients.”
Corporate governance is critical to what we want to achieve in the field of culture and conduct.
Mark Carney, Governor of the Bank of England, summed it up very well when he said that “we need global standards for global markets.” Financial markets – and Fixed Income, Currency and Commodities (FICC) markets in particular – are indeed global.
This point has been widely recognized, and one of the primary objectives of the FICC Markets Standards Board (FMSB) is to contribute to the international convergence of standards.
We also need the right balance between market regulation and self-regulation. Self-regulation complements market regulation, and can achieve results that regulation by itself cannot achieve.
It is very difficult, for example, for regulation to regulate culture. This, of course, is one of the key reasons for the establishment of the FMSB.
The recent progress report from the Financial Stability Board (FSB) on the implementation of the FSB recommendations on FX benchmarks confirms my belief that self-regulation can lead to meaningful change.
You can follow our discussion live this afternoon on Twitter by following the hashtag #BBAConf or following @BBAVoice
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At BNY Mellon, risk management is part of everything we do. Our culture is built on the core concepts of personal responsibility for risk awareness and risk management across our company.