Conduct Risk

Cathy Hampson and Gustavo Ortega

INTRODUCTION

The financial crisis of 2007–8 is considered by many economists to have been the worst financial crisis since the Great Depression of the 1930s.¹¹ See: https://web.archive.org/web/20100212214538/http://www.reuters.com/article/pressRelease/idUS193520+27-Feb-2009+BW20090227 The crisis is said to have begun in the subprime-mortgage market in the United States, and subsequently developed into a global banking crisis with the collapse of very well-known financial institutions, such as the investment bank Lehman Brothers in September of 2008. The causes of the financial crisis are perhaps many; however, the primary driver is said to have been excessive risk taking by large banks that gave rise to massive bailouts of financial institutions, a global economic downturn, debt crisis in Europe and a slowdown in Asian markets.

It was fascinating to see how the public and private sectors came together to prioritise activities and immediately focus on stabilising economies and affected organisations in an effort to bring calm back into the markets. The aftermath of the financial crisis also put much emphasis and focus on behaviours of organisations. There was an increase in