25 years: Behavoural science & conduct
Roger describes conduct regulation around the world by listing some examples of regulators and their individual approaches to protecting customer interests.
Roger describes conduct regulation around the world by listing some examples of regulators and their individual approaches to protecting customer interests.
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9 mins 4 secs
Conduct regulation is a practice meant to hold banks and financial institutions responsible for their actions. In the video “Conduct 101”, the rules and attributes of how conduct is regulated is discussed to provide a deeper insight into why conduct regulation was introduced in the first place. After the Global Financial Meltdown in 2008, conduct regulation started to become extremely prevalent across the world.
Key learning objectives:
Know the multitude of ways that regulators measure conduct
Understand which financial institutions are the leaders in conduct regulation
Explain why conduct regulation was created and why it is a popular policy amongst citizens
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Conduct regulators don’t just look at legal certainty, as in the legally defensible value in a contract you’ve sold. Conduct is interested in your vulnerability to changes in public opinion, for example, after the scandals in Australia and the Baltic States. Conduct approach is when regulators apply behavioural science to customer protection. It is not simply making decisions after negligent conduct has happened but rather it is used to prevent any future conduct violations.
Conduct regulation has grown at a furious speed globally since its UK launch in 2013 and there are other countries who have their own versions that predate this formal launch. Why is the Conduct regime taking over the world’s financial markets? Well, to sum up ten years’ research in less than 20 words: It’s popular with the voters, treasury ministers, and faster-acting than old-style econometric regulation.
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