Regulators are increasingly monitoring the banking industry’s culture in the wake of Dodd-Frank and other regulations.
Cliff Stanford, chair of Alston & Bird’s Bank Regulatory Group, says he is asked questions about culture from banks he works with, typically as part of a conversation about a bad result on an exam, such as a matter requiring attention.
“If there is an open, transparent sensibility about issues and concerns, regulators can see that,” Stanford says. “They can see if there is just a bunch of words on paper, but if they really dig, there are problems in particular business lines, reports on allocations of resources. Just by talking to people they can get a sense of what’s going on.”
Stanford estimated that it would probably take five years to bring about a change in a bank’s culture.