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Risk culture and banking supervision

Author

Listed:
  • Alessandro Carretta
  • Vincenzo Farina
  • Paola Schwizer

Abstract

Purpose - This paper aims to analyzing the main risk culture traits of a sample of Central Banks and Supervisory Authorities in Europe as well as of the European Central Bank (ECB). Design/methodology/approach - Risk culture is measured through text data processing of the official discourses made by the head Supervisory Authorities, during the years from 1999 to 2012. Findings - Results highlight heterogeneous but converging risk cultures for European Union (EU) supervisors and the presence of a “distance” between these cultures and the risk culture of the ECB. Originality/value - The paper points out that cultural differences, especially in presence of credit markets still characterized by poor integration, could create unwanted distortion effects during the initial stages of the Banking Union.

Suggested Citation

  • Alessandro Carretta & Vincenzo Farina & Paola Schwizer, 2017. "Risk culture and banking supervision," Journal of Financial Regulation and Compliance, Emerald Group Publishing Limited, vol. 25(2), pages 209-226, May.
    • Handle: RePEc:eme:jfrcpp:jfrc-03-2016-0019
    DOI: 10.1108/JFRC-03-2016-0019
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    Citations

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    Cited by:

    1. Asuamah Yeboah, Samuel & Mogre, Diana & Nartey Menzo, Benjamin Prince, 2024. "Beyond the Numbers: Social Factors in Credit Risk," MPRA Paper 122363, University Library of Munich, Germany, revised 20 Aug 2024.
    2. Jennifer Kunz & Mathias Heitz, 2021. "Banks’ risk culture and management control systems: A systematic literature review," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 32(4), pages 439-493, December.
    3. Lijun Liang & Tongxin Dai & Mengwan Zhang, 2024. "Generation mechanism of behavioral risk for organizational decision-makers in financial institutions: organizational and human errors," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-10, December.
    4. Mohamed Santigie Kanu, 2021. "The Role of Risk Culture in Enterprise Risk Management Implementation," International Journal of Business and Management, Canadian Center of Science and Education, vol. 15(11), pages 1-13, July.
    5. Michele Samuele Borgia & Francesca Di Virgilio & Maura La Torre & Muhammad Adnan Khan, 2022. "Relationship between Work-Life Balance and Job Performance Moderated by Knowledge Risks: Are Bank Employees Ready?," Sustainability, MDPI, vol. 14(9), pages 1-20, April.
    6. Ghafoori, Eraj & Mata, Fernanda & Lauren, Nita & Faulkner, Nick & Tear, Morgan J., 2023. "Measuring risk culture in finance: Development of a comprehensive measure," Journal of Banking & Finance, Elsevier, vol. 148(C).
    7. Ismaila Akanni Yusuf & Agatha Nkem Amadi & Mohammed Bashir Salaudeen, 2020. "Effects of Risk Culture and Appetite on Effective Risk Management in Nigerian Banks: Case Study of United Bank for Africa Plc," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 6(2), pages 81-87, June.
    8. Vikash Kumar Sinha & Marika Arena, 2020. "Manifold Conceptions of the Internal Auditing of Risk Culture in the Financial Sector," Journal of Business Ethics, Springer, vol. 162(1), pages 81-102, February.

    More about this item

    Keywords

    Financial supervision; EU integration; Risk culture; G28; G38;
    All these keywords.

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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