A Theory of How and Why Central-Bank Culture Supports Predatory Risk-Taking at Megabanks
Edward Kane ()
Atlantic Economic Journal, 2016, vol. 44, issue 1, 51-71
Abstract This paper applies Schein’s model of organizational culture to financial firms and their prudential regulators. It identifies a series of hard-to-change cultural norms and assumptions that support go-for-broke risk-taking by megabanks that meets the everyday definition of theft. The problem is not to find new ways to constrain this behavior, but to change the norms that support it by establishing that managers of megabanks owe duties of loyalty, competence, and care directly to taxpayers.
Keywords: Too-big-to-fail; Financial regulation; Financial crisis; Regulatory culture; Financial stability; G20 (search for similar items in EconPapers)
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Working Paper: A Theory of How and Why Central-Bank Culture Supports Predatory Risk-Taking at Megabanks (2015)
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