Culture: measuring the amorphous
A review of the PRA’s working paper on organisational culture and bank risk.
It seems obvious to say it because instinctively we all know it is true: that the organisational culture of an institution will necessarily have an impact on the risks to a firm. However, it would appear that there is surprisingly little research that has investigated this link empirically.
In its new Working Paper (Paper), the Prudential Regulation Authority (PRA) seeks to substantiate this link, using data which is consistently measured over a considerable amount of time for a wide range of banks - both big and small.
This will likely be of interest to boards, committees, and other groups tasked with monitoring culture or running cultural change programmes.
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