Corporate culture in banking

Anjan Thakor ()

Economic Policy Review, 2016, issue Aug, 5-16

Abstract: Until recently, regulatory discourse has paid scant attention to the issue of organizational culture in banking. Yet ethical lapses and systematic weaknesses exposed in the 2007-09 financial crisis suggest that future policy dialogue is unlikely to ignore culture?s significance. Drawing from an approach developed in organizational behavior research, the author introduces a framework for diagnosing and changing corporate culture in a way that more effectively supports the bank?s growth strategy and induces behavior that enhances financial stability. The normative exercise, highlighting the tensions and trade-offs arising from competing organizational goals, is useful for bank leaders seeking to foster a specific culture. An examination of bank culture under the ?Competing Values Framework? also offers insights for policymakers designing regulations that proactively address foreseeable problems.

Keywords: deferred cash compensation; managerial incentives; financial stability; risk management (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (16)

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