On Thursday, a famous Wall Street regulator continued to push senior bankers for cleaning up the culture of their firms so that they can avoid the sort of latest scandals due to which the reputations of big banks have been undermined.
While speaking to bankers, who had gathered for a conference on ethical culture at the New York Fed, the president of the Federal Reserve Bank of New York, William C. Dudley, told that according to him, the focus of bankers should be less on the search for bad apples and more on how the apple barrels can be improved.
Mr. Dudley began pushing banks to improve culture two years ago through a speech that called the ethical lapses of banks a ‘critical problem’. Skeptics were wondering whether the New York Fed has the power or desire to do something that could change behavior on Wall Street or not. The New York Fed was not able to address dangerous weaknesses in big banks prior to the 2008 financial crisis.
Since then, the episodes such as, the so-called London Whale trading scandal at JPMorgan Chase, have led to questions regarding the effectiveness of its regulation.
Even then, when it comes to culture, Mr. Dudley has apparently made some progress. He was helpful in assembling an international effort for cleaning up the banks, under the Group of 30 nations. On Thursday, Mr. Dudley had the support of the managing director of the International Monetary Fund, Christine Lagarde, and the vice chairman of the Federal Reserve, Stanley Fischer. The duo was present at the conference.