Culture in financial services must change, says Sants

The whole culture that exists in the financial services industry needs to be changed, FSA boss Hector Sants has said.

Speaking at a Mansion House conference, Sants said that it is crucial to address the role that culture and ethics play in shaping behaviours and judgements.
 
Sants said that until this issue is addressed, “we will not be able to prevent another crisis of this magnitude from occurring again, and will never fully restore the trust of society in the financial system”.
 
Addressing how regulators and firms can work together, he said: “It is those who manage the financial institutions, who make the judgements, who should be held responsible for them and for restoring the trust between the financial sector and the public. But there is a legitimate role for a regulator in facilitating the right culture.”
 
He went on: “At all times we want an institution to act with integrity. The regulator’s focus should therefore be on what an unacceptable culture looks like and what outcomes that drives. It should not be on defining the culture itself.

“To be completely clear, a box-ticking approach to regulating culture will not work. The regulator must focus on the actions a firm takes and whether the board has a compelling story to tell about how it ensures it has the right culture; which rings true and is consistent with what the firm does.”

Sants also said the public would not regain their trust in bankers until the question of shelling out large bonuses had been resolved.