Through the financial crisis, it became clear that bank boards, executives, and regulators needed a new forum to address key challenges and risks, and to consider the industry’s future direction. The Bank Governance Leadership Network (BGLN) addresses key issues facing complex global banks.
The primary focus is the non-executive director, but the network also engages senior management, regulators, and other key stakeholders committed to outstanding governance and supervision in support of the mission to build strong, enduring, and trustworthy banking institutions.
The BGLN is organized and led by Tapestry Networks and supported by Ernst & Young. It provides unique opportunities for candid dialogue among non-executive directors from leading global banks, bank executives, regulators, policy makers, and other stakeholders through private roundtable discussions, the annual Bank Directors Summit, and research work streams focused on critical issues for non-executive directors.
Recent network topics:
The recent introduction of the European banking union aims to improve cross-border supervision of large global banks, but presents challenges for both banks and regulators inside and outside the EU. In March 2013, BGLN participants met to discuss these challenges, concluding: though improved, cross-border supervision is far from optimal; a European Single Supervisory Mechanism (SSM) is coming, but key questions remain; the SSM can only work if other building blocks are in place; and, the debate on the banking union is a microcosm of the debate on European integration and power shifts.
Bank Governance Leadership Network participants have discussed increasingly "intensive" supervision for several years, including supervisors' increasing engagement with senior management and boards. Supervisors and directors are still learning how best to establish trust-based relationships that will allow for constructive, candid engagement. This ViewPoints outlines practical steps that can help cultivate these relationships and focus board-supervisor dialogue on core issues.
Consumer protection in financial services is a growing focus for policymakers, regulators, and banks alike, as it materially impacts banks' products, business models, and governance processes. BGLN participants, including non-executive directors and executives from leading global banks, supervisors, and trade association representatives, discussed the topic in depth, concluding that: the current regulatory environment creates significant challenges in consumer protection; more intensive consumer issue supervision could negatively impact products and services; and boards must become increasingly active in consumer issues.
Nearly five years on from the financial crisis, banks continue to face political and regulatory pressure, macroeconomic uncertainty, and rapidly changing competitive environment. Increasingly, banks are beginning to address core strategic questions. This ViewPoints outlines the discussions on evolving business models from the fourth Bank Directors Summit, including how regulatory and supervisory initiatives are transforming the "rules of the game" for banks, the potential for "radical" change to business models, and the need for boards to start driving banks' long-term strategy.
At the fourth Bank Directors Summit in October 2012, directors representing leading global banks met with leaders from the industry and regulatory community for a discussion on many of the key forces shaping global banking. This ViewPoints covers the range of topics discussed during the summit, including: reforming bank culture; increasing clarity in the global regulatory agenda; the tough global agenda for consumer protection; and the prospect of "radical change" for current bank business models.
Despite broad agreement between banks and supervisory authorities that risk appetite frameworks are a cornerstone of risk management, there exist divergent views between the two on progress, impact and expectations. This ViewPoints outlines the challenges faced in assessing application, the differences between major global banks in implementation, and the potential expectations gap between supervisors and banks in objectives and progress.
Bank Governance Leadership Network
Risk Committee Chair, Strategy Committee Member, UBS