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Archive » September 2021 » Learning from mistakes: the governance of errors in banks with a view to conduct risk

Learning from mistakes: the governance of errors in banks with a view to conduct risk

Alessandro Carretta, Paola Schwizer
September 2021 - n. 9
Keywords: Banche, conduct risk, cultura dei controlli e del rischio
Jel codes: G21, G28, G32

Supervisory rules and guidelines are aiming at an increasingly strict discipline of conduct risk, to limit or eliminate the negative effects it can produce for the financial system as a whole. Even supervisory authorities, as the financial crisis shows, are not immune. Financial institutions and their staff should work to prevent negative consequences of errors and mistakes. The governance and internal control systems, already highly developed, represent important mechanisms to monitor conduct risk and must be made to work well, in form and substance, to ensure that the conduct of institutions and their representatives is always aligned with the highest standards. The best performing organizations are not characterized by the absence of errors, but by the ability to manage them.

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