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Compliance risk in Italian banks: the results of a survey

Giuliana Birindelli and Paola Ferretti

Journal of Financial Regulation and Compliance, 2008, vol. 16, issue 4, 335-351

Abstract: Purpose - The objective of this paper is to highlight the results of a survey on compliance practices in Italian financial institutions (Italian banks and branches in Italy of foreign banks). Design/methodology/approach - The survey is carried out through a structured questionnaire, arranged into several sections: general information on the definition and framework of compliance risk, organizational structure, reporting, culture, purpose and tasks of the compliance staff, assessment of the compliance staff performance and of the risk. The survey is mainly developed on two issues: organizational and risk assessment implications. Findings - It is found that many survey participants are responding positively to regulation developments, since there is a widespread recognition of compliance as a key element for creating value and improving reputation. It is also found that the Italian banks surveyed, whose compliance activities have been usually performed by internal audit, dedicate less attention to compliance matters in comparison with the branches of foreign banks. The institutions interviewed underline the need to have clear guidelines from supervisory authorities, so that they can achieve an effective and efficient management of compliance risk. Originality/value - This subject has not been analyzed in depth to date. This paper provides a representative view of the management of compliance risk in Italian banks, thanks to the variety of the issues under observation and the size of the sample.

Keywords: Risk management; Regulation; Banks; Financial control; Italy (search for similar items in EconPapers)
Date: 2008
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DOI: 10.1108/13581980810918404

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Handle: RePEc:eme:jfrcpp:v:16:y:2008:i:4:p:335-351