It identifies a series of hard-to-change cultural norms and assumptions that support go-for-broke risk-taking by megabanks that meets the every-day 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.
A Theory of How and Why Central-Bank Culture Supports Predatory Risk-Taking at Megabanks
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This paper applies Schein’s model of organizational culture to financial firms and their prudential regulators.
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- WP34-Kane (pdf, 1.3 MB)
- G2 Financial Institutions and Services
- G21 Banks; Depository Institutions; Micro Finance Institutions; Mortgages
- K23 Regulated Industries and Administrative Law
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