NY Fed: Something is Fundamentally Wrong with Wall Street Culture

November 5th, 2015

NY Fed:  Something is Fundamentally Wrong with Wall Street Culture

 

The New York Federal Reserve Bank hosted a workshop today on reforming culture and behavior in the financial services industry. William Dudley, President and Chief Executive Officer of the New York Federal Reserve Bank, delivered opening remarks before representatives from many of Wall Street’s biggest banks.  Dudley discussed the responsibilities of the industry and the role of the official sector in improving what he called “untrustworthy behavior” and “deep-seated cultural and ethical failures.”

Dudley urged the industry to examine systemic misconduct, saying, “The banking scandals that followed the financial crisis are evidence that something fundamental is wrong.  I would encourage each of you to consider not just specific examples of misconduct, but the patterns within them that point to underlying causes.  I suspect we will see a strong overlap with those factors that contributed to the financial crisis.”  He also commented that the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) “did little to curb misconduct,” and was happy to see the emergence of new approaches to supervision to address culture, conduct and governance.   He closed by encouraging the financial services industry to “act on this information, and the official sector should hold institutions accountable for demonstrating sustained, observable progress.”

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