Urgent action needed to reform banks' corporate culture

AS one case of wrongdoing by banks hits the headlines and is followed by yet another, public confidence in the soundness of the banking system is further undermined. Pressures on banking authorities to add still more regulations are rising, but corporations alone can change their core cultures. They alone can ensure that sound values guide all employees and that public trust is earned by acting with integrity.

Many major banks are striving to bolster the way they do business and improve employee conduct. Yet, a number of them are failing in this critical endeavour. And, in many instances, the reform rhetoric by chief executives is not leading to across-the-board implementation of needed changes. Comprehensive cultural and conduct reform is now urgent.

Over the last 18 months, I have co-chaired a steering committee of the Group of 30 to develop a reform agenda. We have been influenced by the confidential statements provided to us through nearly 80 interviews in 16 countries with public and private sector leaders of finance.