Nicolas Corry, Managing Director, firstname.lastname@example.org
Press reports of the deal Standard and Poors have reached with Federal and State Agencies shines a light on the challenge faced within the Financial Industry to bring about cultural change. Paul Barrett writing for Bloomberg describes one of the defences S&P’s lawyers used early in the case, making the blunt observation: “The company said that its claims to objectivity and independence were “mere puffery,” the sort of marketing blarney that sophisticated investors don’t believe.”
We commonly encounter nuances of this through our work supporting Internal Audit. We find it is a sentiment, or culture, that is deeply ingrained in the DNA of Front Office Staff. “Everyone knows how the market works”, “They are all Big Boys”, are all precursors to the push-back levelled at Internal Audit that control staff do not understand how the market works, and the points being raised are not points at all. By challenging these assertions we help Control Staff bring about effective change. Skadi Limited’s Consultants are all experienced Front Office practitioners. All have been Traders, Capital Markets, Research and Inter-Dealer Broking professionals. We help Control Staff identify where Front Office behaviour falls short, placing the institution and its staff at risk.
Regulation is presently undergoing a sea change. Many activities within the Financial Industry have been guided by etiquette rather than rigorous rule structure. Whether this continues remains to be seen, but we would all do well to review how etiquette is defined: “The customary code of polite behaviour in society or among members of a particular profession or group.” Adhering to this sentiment would do much to render the “Big Boy Defence” obsolete.