Bank of England Deputy Governor Minouche Shafik and Executive Director James Proudman today speak at the New York Federal Reserve’s conference ‘Reforming Culture and Behaviour in the Financial Services Industry: Expanding the Dialogue’. We have published the text of both speeches.
James outlines the PRA’s approach to culture and accountability, and how we apply this to firms – including through the new Senior Managers Regime and remuneration rules (individual accountability) and guidance on governance for boards (collective accountability).
James stresses that both individual and collective responsibility are crucial to promoting a healthy culture within the sector. He says: ‘taken together, the reforms that we have put in place with respect to both individual and collective responsibility are aimed at creating a regime in which the senior management of firms are now ‘on the hook’ for the decisions taken within the firm: both the key strategic decisions taken at senior management level, and the framework of delegations and decision-taking that cascades through the organisation.’
James adds: ‘Ensuring there is a clear and transparent answer to the question ‘who’s in charge?’ has been a priority of the prudential reform agenda in the UK.’
Both Minouche and James reinforce the Bank’s commitment to improving standards and ethics in financial markets.