This paper applies Schein’s model of organizational culture to financial firms and their prudential regulators. It identifies a series of hard-to-change cultural norms and assumptions that support go-for-broke risk-taking by megabanks that meets the everyday definition of theft. The problem is not to find new ways to constrain this behavior, but to change the norms that support it by establishing that managers of megabanks owe duties of loyalty, competence, and care directly to taxpayers.
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Kane, E.J. A Theory of How and Why Central-Bank Culture Supports Predatory Risk-Taking at Megabanks. Atl Econ J 44, 51–71 (2016). https://doi.org/10.1007/s11293-016-9482-x
- Financial regulation
- Financial crisis
- Regulatory culture
- Financial stability