Creating a Culture of Success: Reducing the Likelihood of Conduct Failures

Brendon Young

The banking and financial services industry suffered substantial reputation damage in the years since the 2007–08 global financial crisis due to concerns about conduct. Initially, the reputation damage stemmed from the size of losses in the crisis and concerns about the magnitude of risk being taken by the industry pre-2008. However, this has been exacerbated by a range of conduct issues that have come to light that have severely affected the way the industry is viewed. These cases have arisen in both wholesale and retail product markets, and have affected banks across the global financial centres. Blame has been placed on the culture of the banks, with the reform of culture being widely acknowledged as essential to restore trust and confidence in the industry. In October 2012, the chief executive officer of RBS, Stephen Hester, stated: “Banks must undergo a wholesale change in their culture and refocus their behaviour on meeting the needs of customers to restore trust in the industry” (Reuters, 2012). Similarly, António Horta-Osório, the group chief executive of Lloyds Banking Group, told the UK Parliamentary Commission on Banking Standards in July 2012 that the banking industry