On Tuesday, June 4, New York Fed President John Williams spoke at the fifth conference on culture in financial services hosted by the Bank.
“We have learned that simply levying large fines on companies is not enough to create lasting change. More is needed.”
“[A] scandal often spurs change. But if leaders wait until things have gone wrong to think about culture, they’re leaving it too late.”
“Understanding the full complexity of what forms a culture is important, but our unique position within the financial system means the Federal Reserve Bank of New York must do more.”
Speaking to an audience of regulators, bankers, and academics, President Williams articulated his firm commitment to the issue of culture in financial services. He noted that in the 12 months since he took the helm of the New York Fed, “stories of money laundering and fraud have been an all-too-frequent feature” in the press. He said that “addressing the root causes of misconduct must remain a high priority for the industry and regulators.”
President Williams outlined his approach to the New York Fed’s work in this area, which is guided by three principles: “connect,” “convene,” and “catalyze.” He detailed a number of initiatives spearheaded by the New York Fed, aimed at giving people access to the latest research and bringing together stakeholders. He said the New York Fed was “walking the walk” as well as “talking the talk” and taking the Banking Standards Board Assessment, which measures the extent to which characteristics like “honesty, accountability, and respect” are demonstrated by an organization.
He concluded by saying that “the journey toward reforming culture in the banking and financial services industry is a long one. And there’s no single action that a regulator or a bank can take to make it happen. Getting it right is going to require the will and expertise of regulators, financial services firms, academics, and practitioners.”
This article was originally published by the New York Fed on Medium.
The views expressed in this article are those of the contributing authors and do not necessarily reflect the position of the New York Fed or the Federal Reserve System.