Corporate culture in banking
Abstract: Until recently, regulatory discourse has paid scant attention to the issue of organizational culture in banking. Yet ethical lapses and systematic weaknesses exposed in the 2007-09 financial crisis suggest that future policy dialogue is unlikely to ignore culture?s significance. Drawing from an approach developed in organizational behavior research, the author introduces a framework for diagnosing and changing corporate culture in a way that more effectively supports the bank?s growth strategy and induces behavior that enhances financial stability. The normative exercise, highlighting the tensions and trade-offs arising from competing organizational goals, is useful for bank leaders seeking to foster a specific culture. An examination of bank culture under the ?Competing Values Framework? also offers insights for policymakers designing regulations that proactively address foreseeable problems.
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Provider: Federal Reserve Bank of New York
Part of Series: Economic Policy Review
Publication Date: 2016