Logo Eurofi

Home > Speakers' views

Ensuring appropriate conduct and culture in the financial services industry - New trends in the financial sector

Culture – Supporting a global approach for global markets

By Revell Susan - EMEA General Counsel, BNY Mellon


Whilst activities of banks have evolved and become more regulated, their fundamental existence is still based on trust. Notwithstanding increased levels of regulation aimed to drive better outcomes from the sector, the post-crisis years have seen continued crises in trust and confidence. Culture is therefore an increasingly important theme for the financial sector globally and in the EU.

Elements of EU public policy are and must continue to be supportive of good culture in the financial sector. For example, EU policies on transparency and market integrity help markets to work more transparently and effectively, and create the conditions for good culture to thrive. Regulatory policy and supervision must also continue to ensure appropriate disincentives are in place to sanction poor conduct.

There is however no need for an overarching EU policy on culture. The re-establishment of a clear vision which can drive the success of individual banks must be the role of the Board and business leaders. Culture must be owned by all individuals that participate in the financial system. The industry must own and drive good culture throughout the financial sector, and re-earn the trust it’s lost in recent years. This is not an easy task and requires, among others, that shareholders’ expectations morph from shorter term profitability to longer term sustainability.

Regulators and supervisors should publicly support good culture and conduct in the financial sector. Regulators can do this by ensuring that their rulemaking does not create misalignment with good culture. Supervisors can support good culture by embedding this into their meetings and thematic reviews with firms.

Effective global markets require a global approach to building good culture.

Recognising many key markets are global in nature suggests that effective global markets require a global approach to building good culture and not just within the EU.

Culture is rightly and increasingly on the agenda of policymakers and firms globally. Examples are the G30 report on “Banking Conduct and Culture: A Call for Sustained and Comprehensive Reform” (July 2015), the creation of the FICC Market Standards Board (FMSB) post the Bank of England led Fair and Effective Markets Review (FEMR) and industry led bodies such as the Banking Standards Board.

Individuals in financial services firms each have a responsibility to own and drive good culture, in order to earn back the trust of wider society. There is no single way of doing this – each firm needs to find its own ways of delivering and driving good culture.

BNY Mellon is working on this at a number of levels, including:
• BNY Mellon has embedded cultural values into our corporate mission, our performance management and governance processes.
• Our EMEA Chairman, Michael Cole-Fontayn, actively participated in FEMR, and is a board member of FMSB. Other leaders are also active in our culture hubs.
• BNY Mellon views management and culture as intertwined – for example, we talk as much about risk culture as we do about risk management.
• BNY Mellon supports our employees through training and development programs with tools to help promulgate positive culture, conduct and behaviours.

We should not expect a cultural “revolution” but further evolution and ensure there is no place for a culture of impunity within the global financial markets.