New York Fed President William Dudley on Monday suggested that one way to improve bank culture is to make senior management bear some of the burden when their institutions are fined by regulators.
“It doesn’t seem fair or prudent to shield the decision-makers from responsibility for costly breakdowns as much as they are now,” Dudley said in a speech at the U.S. Chamber of Commerce in Washington.
Greater personal responsibility could be a powerful incentive to promote better behavior, Dudley said.
“I suspect changes in these areas would lead senior managers to encourage their staff to speak up earlier about emerging risks, be more attentive when red flags are raised and respond sooner and more forcefully,” Dudley said.
Bank fines associated with