Ever since Wells Fargo reminded us that banks are cesspools of duplicity, dishonesty and malign incentives, New York Fed chief Bill Dudley has been thinking about ways to deal with what are euphemistically called “cultural failings.” And he’s come up with some ideas.
First, banks need to stop plastering mission statements to toilet-stall doors and start paying people for not violating laws, rules, regulations and corporate codes of conduct.
Second, people like himself need to start asking questions, notably about how a firm’s compensation structure might encourage good, rather than profitably bad, behavior.
Third, he’d like Congress to issue him a tranquilizer gun and let him loose on Wall and Main streets to implant tracking devices in John Stumpf, Carrie Tolstedt, Wells Fargo’s other 5,300 bad apples, and anyone else doing anything wrong, so that he and his fellow supervisors can precisely track their exodus from Wells branches to branches of other banks.
Mr. Dudley has proposed a bad banker database that would track culture failings, an issue he calls the “rolling bad apples” problem. This issue needs legislative input from Congress to be taken up, in order to align it with laws protecting employee rights.