Conduct Risk in Financial Services: Lessons from the Hospitality and Leisure Industry

Peter Haines

Throughout my lectures and attendance at numerous risk seminars since the crisis, one theme has persisted: the financial services industry may have many lessons to learn from other sectors when it comes to conduct risk.

This theme was reiterated in a speech at the Financial Conduct Authority (FCA)’s Enforcement Conference in 2014, where Tracey McDermott stated (in light of the foreign exchange (FX) market manipulation):

Faced with this misconduct, which is so similar to that of the recent past, people can say that lessons are not being learned. And there have been all too many examples – in both the retail and wholesale space – to reinforce that view.

These repeated failures undermine the reputations of both the regulated and regulator. In this, we are actually all in it together. But more important than our reputations is the reputation of the financial services industry as a whole.

(McDermott 2014)

She went on to say:

We cannot rewrite the past but we can chart a different future. We will not, however, do that if we forget the past. The challenge, as Lyndon Johnson said, is that we must “learn lessons from the past but we can’t live in it”.

A little over

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