Monitoring Misconduct: Maintaining and Developing Banking Standards

The Business School (formerly Cass) welcomed José Manuel Campa, Chairperson of the European Banking Authority (EBA) to deliver a keynote lecture exploring how bank conduct could be monitored and improved.

Mr Campa addressed an online audience at the ‘Monitoring Misconduct: Maintaining and Developing Banking Standards’ event, which took place on the same day that the Centre for Banking Research launched its Conduct Costs Project.

The EBA was set up in 2011 as a response to the 2008 global financial crisis, with a mandate to strengthen the prudential framework and support financial stability.

Mr Campa spoke about the role of the EBA in creating a culture of transparency, trust and accountability, with emphasis on those in senior management roles to lead by example.

“Misconduct and subsequent financial penalties threaten to heavily undermine trust in banking systems,” Mr Campa said.

“Investors and stakeholders, especially consumers, should always benefit from the highest ethical and legal standards.

“A lot of work has been done in the last decade to adjust risk culture and limit cases of misconduct, but there is still plenty of room for improvement in governance.

“The research performed at the Centre for Banking Research’s Conduct Costs Project will further help us to identify areas that need addressing and push our agenda for industry compliance.”

Mr Campa then answered questions from the panel and audience on topics ranging from the importance of gender diversity in reducing misconduct, to the rise of Environmental, Social and Corporate Governance (ESG)-friendly banking and complexity of EBA guidelines.

Professor Barbara Casu, Director of the Centre for Banking Research and Professor of Finance at the Business School (formerly Cass) introduced the report during the event, and said that the project’s findings would support bodies like the EBA to enforce and encourage change.

“Banks play such an important role in shaping society as well as the global economy,” Professor Casu said.

“Any misconduct therefore has far-reaching ramifications beyond banks’ shareholders. The Conduct Costs Project highlights areas of weakness in banking conduct, to better inform the sector of where it is failing and how it can take steps to reduce financial penalties and other associated costs that arise through misconduct.

“It was excellent to hear Mr Campa speak and endorse the work that we do in the Centre for Banking Research. We look forward to developing our strong ties with the European Banking Authority further as we grow the Conduct Costs Project.”

Watch the full video playback of ‘Monitoring Misconduct: Maintaining and Developing Banking Standards’.

Read more about the Conduct Costs Project.