They were not two remote tail risks that both happened to materialize, or just a bad coincidence. There have been too many examples of other misconduct to list. Wells Fargo is the most recent example, but serious misconduct is not confined to a single jurisdiction or a business model. The evidence, which now stretches over a decade, has only reaffirmed my initial belief that there is an industry-wide problem. In light of these continuing and widespread failures, my colleagues and I recognize the importance of culture—that is the unwritten norms and accepted practices of an organization. The culture of each firm will necessarily be its own. But the pervasiveness of problems—across firms and countries—points to common, industry-wide norms that need attention. An industry-wide problem needs an industry-wide solution. I also think that, when the problem is cultural, any solution must be industry-driven. It is the public sector’s job to establish and enforce rules, but rules face some inherent limits in shaping conduct and behavior. It is natural to adapt to the behaviors that we observe around us. A common illustration of this point is the speed limit. Most drivers move with the flow of traffic. They pay less attention to a number posted on a sign. This is not to deny the necessity and importance of regulation, or to criticize any of the particular rules imposed in response to the financial crisis. But, we also must recognize that it is impossible to create a rule for every situation.
Cecilia Skingsley: Experience with macroprudential policies Summary of a speech by Ms Cecilia Skingsley, Deputy Governor of the Sveriges Riksbank, at a workshop arranged by the Committee on the Global Financial System, BIS, held at the Hong Kong Monetary Authority, Hong Kong, 10 August 2015. *  *  *  Since the global financial crisis, several countries have started implementing macroprudential policies. This workshop has provided us with the opportunity to deepen our knowledge regarding how different countries choose, calibrate and implement different kinds of macroprudential instrument. We have also gained a greater understanding of the efficiency of these instruments, as well as of how different countries incorporate macroprudential settings in the calibration of monetary policy. Although we have come a long way the past few years as regards setting up institutional frameworks and developing tools, macroprudential policy is still a relatively new policy field in many countries and there are many important issues that need to be addressed. I would like to elaborate on three of these issues. The first is the challenge of determining the proper mix of policy instruments and the right balance between them, and deciding how fast and resolute our actions should be when imbalances are building up. For example, on the one hand, we know from international experience that credit growth can be difficult to curb once it starts accelerating. This would speak in favour of prompt and strong measures.