Hector Sants, FSA Chief Executive, spoke at the Mansion House Conference on Values and Trust 2010. In order to restore the public’s trust, Mr Sants considers that it is crucial to address the role that culture and ethics play in shaping behaviour and judgements within fi rms. He said that those who manage fi rms should be held responsible for them and for restoring the trust between the fi nancial sector and the public.
Regulators should encourage fi rms to have a culture which encourages individuals to make appropriate judgements. Tools regulators could use to facilitate or enforce the adoption of an appropriate culture in fi rms include infl uencing the composition of management, infl uencing the incentives for good behaviour, requiring high standards of effective risk management and deterring poor behaviour.
Mr Sants indicated that the FSA will focus on incentives for bankers and that trust will not be restored unless bankers demonstrate sensitivity and exercise restraint. Future remuneration structures need to reinforce the concept of employers as custodians of the fi rm and should generate a sense of long-term ownership.