Pedro Machado is a Partner at PwC Portugal, co-leading FS Risk & Regulation and leading the EMEA FS workstream on governance & conduct. This post is based on his contribution to the Roundtable on “Conduct and culture: what priorities in the financial services industry?”, held at the Eurofi High Level Seminar 2016.
The Eurofi High Level Seminar 2016, which took place in Amsterdam from 20-22 April during the Dutch EU Council Presidency, examined new trends and objectives in the financial sector, amongst which the improvement of conduct and culture. The full report of the event was made available this month, [1] containing an account of the discussions held during the roundtable on conduct & culture. [2] The choice of this theme denotes both a new trend in the financial sector and growing regulatory concern with conduct & culture in the financial services industry.
Although amorphous as a concept, culture is very much in the regulator’s sights, responding to the widely held belief that poor conduct was at the root of both the 2008 financial crisis and more recent market scandals. Whilst the initial regulatory priority was to promote a more risk-aware culture to support prudential regulation, the examples of Libor and FX manipulation and collusion behaviors helped build the case for the conduct element of culture to rank high in the regulator’s agenda. The growing focus on conduct and customer protection extends the cultural lens into the murkier areas of ethics and integrity: what does “good” look like?
