Fed's Dudley tells banks to fulfil their purpose
The Banking Standards Board (BSB) of the United Kingdom found in results of a survey with 28,000 respondents in the financial industry that almost 30% would be worried about negative consequences if they raised concerns at work, said William Dudley, head of the Federal Reserve Bank of New York.
"That shows, perhaps more than any other finding, that there is still a long way to go in creating a culture for long-term success in banking. In addition, approximately one quarter of employees did not affirmatively agree that their organization puts customers at the center of business decisions," he stated in London at the institution on Tuesday and called for action to achieve sustainability.
Incentives will model behavior, which in turn drive culture, so banks should adapt the approach to long-term commitment, according to Dudley. He stressed those factors from wrong strategies contributed to the financial crisis, and he pinpointed the recent scandal involving Wells Fargo and Co. "Like mortgage brokers in the early 2000s, it appears that job security depended almost exclusively on meeting targets, regardless of how those targets were met. There was a serious mismatch between the values Wells Fargo espoused and the incentives that Wells Fargo employed," the New York Fed president said in prepared remarks.
Good culture cuts the number of misconduct issues and saves internal costs intended for monitoring, he underscored and added that if employees speak up, problems get early attention and tend to stay small.