Regulating financial institutional culture: reforming the regulatory toolkit

Wardrop, Ann, Wishart, David and McMahon, Marilyn 2016, Regulating financial institutional culture: reforming the regulatory toolkit, Journal of banking and finance: law and practice, vol. 27, pp. 171-183.

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Title Regulating financial institutional culture: reforming the regulatory toolkit
Author(s) Wardrop, Ann
Wishart, David
McMahon, MarilynORCID iD for McMahon, Marilyn orcid.org/0000-0002-5822-3173
Journal name Journal of banking and finance: law and practice
Volume number 27
Start page 171
End page 183
Total pages 12
Publisher Thomson Reuters
Place of publication Rozelle, N.S.W.
Publication date 2016
ISSN 1034-3040
Keyword(s) financial regulation
corporate misconduct
Netherlands Central Bank model
ASIC
Summary Unethical behaviour and misconduct in the financial services industry is asignificant problem. Laws aimed at misconduct or incentives to misbehave can be rendered ineffective by poor culture within financial institutions. Various regulatory and industry initiatives to tackle the problem have been proposed or put in place in Australia. This article provides an overview of these initiatives and argues that while such strategies may be worthwhile, they also have shortcomings. The article contends that ameliorating cultural problems within the financial industry requires a multi-disciplinary approach and Australia should therefore consider introducing a supervisory technique pioneered by the Netherlands Central Bank (DNB) that incorporates social andorganisational psychology. It further argues that this approach, when placed in the hands of a regulator, offers a radical regulatory tool that could provide the “missing link” in promoting a culture of integrity within financial institutions.The DNB approach is described and various legal, theoretical and policy issues raised by this approach are discussed.
Language eng
Field of Research 180109 Corporations and Associations Law
1501 Accounting, Auditing And Accountability
1801 Law
Socio Economic Objective 970118 Expanding Knowledge in Law and Legal Studies
HERDC Research category C1 Refereed article in a scholarly journal
Copyright notice ©2016, Thomson Reuters
Persistent URL http://hdl.handle.net/10536/DRO/DU:30088471

Document type: Journal Article
Collections: Faculty of Business and Law
Law
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