The prudential regulator warned Australia’s largest financial institutions they face big financial penalties in the form of capital charges unless risks – including poor culture – are managed to its satisfaction. The threats were noted in a report released Wednesday.
This 28-page paper focuses on culture and risk culture. Academics have criticized this term for being difficult to define but this has been recognized in the report.
“While APRA acknowledges the challenges of measuring and analysing risk culture, it appears there remains significant score for improvement in this area,” the report reads.