Risk culture and banking supervision

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.

Citation

Carretta, A., Farina, V. and Schwizer, P. (2017), "Risk culture and banking supervision", Journal of Financial Regulation and Compliance, Vol. 25 No. 2, pp. 209-226. https://doi.org/10.1108/JFRC-03-2016-0019