The change in banks’ business models from “originate to hold” to “originate to repackage and sell”, which was the proverbial spark in the tinder box that set off the financial crisis, can be seen as a prime example of losing sight of the goal of maximising long-term value.
Second, a bank’s management and board must have a sense of responsibility for developing the bank’s individual risk culture, thus enabling it to deal with risk in a way that supports this long-term business perspective and fosters transparency and accountability.