In his keynote speech at the conference on values and trust today, the Financial Services Authority (FSA) chief executive, Hector Sants, emphasized the important roles of regulators in facilitating the right culture within firms.
According to Sants, the right culture “encourages individuals to make appropriate judgments and to deliver the outcomes we are seeking.” He continued: “At all times we want an institution to act with integrity. The regulator’s focus should therefore be on what an unacceptable culture looks like and what outcomes that drives. It should not be on defining the culture itself.”
Sants likewise stressed on the need for regulators to focus on outcomes that the culture delivers and to demonstrate that the firm has the right framework for assessing and maintaining that culture. He also expressed his opinion that remuneration must be exercised with restraint, in his speech, and that without bankers demonstrating this restraint, public trust on the banking system will not be restored.