There are four important forms of oversight that should be included in the organisational structure of any bank in order to ensure appropriate checks and balances: (1) oversight by the board of directors or supervisory board; (2) oversight by individuals not involved in the day-to-day running of the various business areas; (3) direct line supervision of different business areas; and (4) independent risk management, compliance and audit functions.
Moreover, it is not merely a question of how much we invest in new tools but also what we do with them. Indicators of how well we use labour and capital to produce output (such as multifactor productivity) have been exceptionally weak for years. We can do better.