As the Bank of England’s Chief Economist Andy Haldane put it: “Only in banking do control rights and incentive wrongs combine so uncomfortably.” Instead of the public providing cost-free insurance for banks, the onus is on banks to insure themselves against failure. Only then are risk and reward aligned in a way that serves the public good.
Cooperation between the macro- and micro supervisory functions should be so close that it becomes self-evident at all levels of the organisation and there are no bureaucratic obstacles or turf battles between the two functions. [You have reached a good level of cooperation, when the alternative way of working than doing things together and exchanging data and ideas, does not even cross peoples’ minds.]