faith in the banking industry and restore the image of bankers as decent, trustworthy and upstanding businessmen. by “ us, ” i mean banks, other companies in the financial industry, and supervisors. regulators can create a proper regulatory framework, set the right incentives and encourage good conduct. however, taking the necessary action – that is, implementing a code of conduct and focusing on ethics and culture in daily corporate life – is the responsibility of each financial company. but how can banks and financial companies achieve this aim? i already stated earlier that ethics and culture are highly personal. individual values and ethical norms are informed by individual life experiences, family and cultural background, the generation one belongs to, and many other things. but nonetheless, it is crucial for companies to find a common basis : a set of values accepted and lived by each individual employee and the company as a whole. this is not a trivial task : in the realm of culture and ethics, there are neither universal “ best practices ”, nor are there metrics by which success can be quantified. it is thus very difficult to develop specific criteria that define the culture of a company. to present an example : at the bundesbank we have introduced six leadership principles, in order bis central bankers ’ speeches to set a good tone from the top. these principles are : recognition, communication skills, responsibility, equal opportunities, judgement and motivation. of course, others may choose different leadership principles, but each entity has to make its own choice. however, these principles, although chosen for a different purpose, of course also influence the bundesbank ’ s corporate culture. “ responsibility ” is a value i would like to discuss with you. what about actions that are not expressly prohibited? does that mean they are permitted? as seneca said : “ shame may restrain what the law does not prohibit ”. so, by which standards do we define what is permitted? i think each bank should try to fulfil its corporate social responsibility. this is a kind of self - regulation by which companies commit to live up to their responsibility towards their stakeholders : their customers, their owners and their staff. of course this is not legally binding, but if a company it should try to meet these expectations and have its customers ’ interests at heart. this should also be in the banks ’ self - interest, because there is a feedback loop between a company and its stakeholders. so if the bank respects its stakeholders, it will generally be rewarded : stakeholders will

feel valued, trust will grow, and the bank will acquire more business in the future. in a nutshell : sustainable profitability over the long term is not possible without ethical conduct. i ’ d like to know what you think of this statement. to sum up, in a memo to berkshire hathaway shareholders in 2006, warren buffett wrote that “ culture, more than rule books, determines how an organization behaves. ” i believe there is a lot of truth in this statement. in the end, corporate culture is defined not by rule books but by the behaviour of each individual employee. after all, a company ’ s public reputation is essentially the sum of the behaviour of all its individual employees. finally, introducing a corporate culture or defining a set of ethics and values is important, applying them to daily routines is even more important. each and every one of us can begin by reflecting on, and reexamining, our own behaviour. thank you. bis central bankers ’ speeches