More generally, good governance, with the right checks and balances in place, can keep such problems from emerging. Governance has been neglected by 4/6  BIS central bankers' speeches  regulators and supervisors for far too long. I see it as a crucial topic for the years to come.
For European banking supervision, governance is a key issue – and has been from the very beginning. The quality of a bank’s governance is one of the four pillars of our SREP. How could we judge a bank to be safe and sound without assessing its governance framework? As part of our SREP, we also assess the banks’ risk appetite frameworks, their RAFs.