iv Latest data available from the World Wealth and Income Database suggest income shares of the top 1% of: 18% US (2015); 13% UK (2012); 8% Australia (2013); 8% Canada (2013); 10% Ireland (2009). See also: Atkinson, A, Piketty, T, and Saez, E, 2011, “Top Incomes in the Long Run of History”, Journal of Economic Literature, 49(1), 2011, 3-71. v Saez, E and Zuchman, G (2015), “Wealth Inequality in the United States since 1913: Evidence from Capitalized Income Tax Data”. vi Milanovic, B. (2016), Global Inequality: A New Approach for the Age of Globalization, Harvard. vii As my colleague Ben Broadbent has pointed out, this explains why rising real house prices did not result in large increases in the Gini measure of wealth inequality: compared to financial assets, housing is more evenly distributed among the population, so rising house prices tend to benefit the median in the wealth distribution. See Broadbent, B (2016), “The distributional implications of low structural interest rates and some remarks about monetary policy trade-offs”, speech at the Society of Business Economists Annual Conference, November. viii Credit Suisse Research Institute (2014), Global Wealth Databook 2014, London. See also Alvaredo, F., Atkinson, A. and Morelli, S. (2016), “The Challenge of Measuring UK Wealth Inequality in the 2000s”, Fiscal Studies, 37(1). ix Gardiner, L. (2016), “Stagnation Generation: the case for renewing the intergenerational contract”, http://www.resolutionfoundation.org/publications/stagnation-generation-the-case-for-renewing-the-intergenerational-contract x Hood, A (2016), “The outlook for living standards”, IFS post-Autumn Statement 2016 briefing, Institute for Fiscal Studies.

By contrast, in firms with low levels of cultural capital, formal policies and procedures do not reflect “the way things are really done.” Misconduct results from the norms and pressures that drive individuals to make decisions that are not aligned with the values, business strategies, and risk appetite set by the board and senior leaders. Employees do not speak freely when they have concerns, and directors and senior managers do not find out about improper conduct until it is uncovered by the authorities. Rules may be followed to the letter, but not in spirit. All of this increases misconduct risk and potentially damages the firm and the industry over time. To be clear, I am not saying this is easy. Culture is difficult to assess because it is not a single, point-in-time metric, but a multi-dimensional concept with different implications for different parts of an organization. This complexity suggests that no single metric, solution, approach, or template will work for every firm in every circumstance.5 Consider the different roles of key players in mitigating misconduct risk and building and sustaining a healthy culture. The board of directors, senior management, staff, investors, industry groups, and the official sector might all see and assess aspects of a firm’s culture differently. Today, I will focus on a few of these stakeholders. Boards of Directors In 2017, the New York Fed hosted a culture measurement workshop that included a panel of board members from various financial firms.