exchange manipulation provide hard evidence that there remains work to be done. ” 10 this is clearly an encouraging difference in perspectives. the public sector, too, has paid increasing attention to culture. the group of thirty, the basel committee, the european systemic risk board, and the financial stability board have issued papers on culture, governance, and misconduct risk. the fair and effective markets reviewa joint project of the bank of england, the financial conduct authority, and her majesty ’ s treasury - has called for heightened standards for market practice in matters affecting the public good. and in the last year, we have seen emerging approaches to supervision that aim to address culture, conduct, and governance. in particular, the central bank of the netherlandsde nederlandsche bank - has pioneered new techniques for the supervision of corporate governance, especially for assessing the group dynamics of boards and senior management. 11 culture also features prominently in criminal enforcement. the u. s. department of justice requires its prosecutors to determine “ the pervasiveness of wrongdoing ” at a corporation before seeking an indictment. according to its prosecutors ’ manual, “ [ t ] he most important [ factor in making this determination ] is the role and conduct of management. although acts of even low - level employees may result in criminal liability, a corporation is directed by its management and management is responsible for a corporate culture in which criminal conduct is either discouraged or tacitly encouraged. ” 12 individuals, including senior managers, also face criminal liability for their conduct. recent guidance from the u. s. department of justice places greater emphasis on individual culpability. 13 and the recent convictions of two traders for rigging libor, one of whom served as the global head of liquidity and finance at a major bank, may send a powerful message to bankers about the consequences of their misconduct. 14 the new acceptance of culture as an important area of focus was evident at a workshop that the federal reserve bank of new york hosted on november 5. christine lagarde, managing director of the international monetary fund, and stanley fischer, vice chairman of the board of governors of the federal reserve system, headlined a contingent of over 20 public sector authorities from around the globe. they were joined by the ceos, senior executives, and board letter of martin p. dunn to the office of chief counsel at the u. s. securities and exchange commission ’ s division of corporation finance, january 17, 2014. federal advisory council and board of governors, record of meeting,

have mentioned, and summaries of our two workshops on culture. i hope you ’ ll take a look. to conclude, the financial crisis and subsequent scandals revealed deep and continuing flaws in the culture of banking. the responsibility to address these flaws rests with the banks themselves. many industry leaders have initiated reform programs within their firms. it is important to keep the momentum going. reform requires relentless and sustained effort : from the top of an institution to its most junior employees, and across all of the institution ’ s business activities. reform must include the full scope of an employee ’ s career, beginning with recruiting and continuing with annual performance management, compensation and promotion decisions. we in the official sector will be looking to the industry to fulfill its end of the bargainto act consistent with the public well - being, to value long - term stability over short - term gain, and to take account of all stakeholders in making decisions. thank you for your time and attention. https : / / www. newyorkfed. org / governance - and - culture - reform / index. html. bis central bankers ’ speeches