A Theory of How and Why Central-Bank Culture Supports Predatory Risk-Taking at Megabanks
Edward Kane ()
No 34, Working Papers Series from Institute for New Economic Thinking
This paper applies Scheinâ€™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 every-day 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: regulatory culture; financial crises; too big to fail; theft by safety net; political economy (search for similar items in EconPapers)
JEL-codes: G20 G21 K23 P16 (search for similar items in EconPapers)
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Journal Article: A Theory of How and Why Central-Bank Culture Supports Predatory Risk-Taking at Megabanks (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:thk:wpaper:34
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