Taking The Floor: Models, Morals And Management In A Wall Street Trading Room

Over the past decade, regulators in the UK and elsewhere have sought to avoid a repetition of the global financial crisis by turning to bank culture. New culture teams have emerged, statements of purpose have been drafted, and self-regulatory initiatives have arisen to administer annual culture surveys to industry participants. Yet these attempts to influence employee behaviour by intervening on their values and beliefs has inevitably been hampered by the parallel use of technologies of control such as risk management metrics (whether it is Value at Risk, AI analytics, stress-testing, or ever-larger compliance teams, etc) that often displace employees’ norms and values in shaping decisions. In his talk, Beunza explores the challenges entailed in enhancing cultural standards in an industry dominated by technologies of control, as laid out in his award-winning book Taking the Floor. Based on extensive, fly-on-the-wall observations at a Wall Street trading room over the span of sixteen years, Beunza considers the case of a bank executive who sought to remedy the ethical shortcomings he observed in derivatives trading by reorganizing his trading floor and challenging the bank’s use of risk management models. Beunza analyses this unique experiment and considers what lessons it offers for financial organizations today: what worked? What didn't? What do we learn from it? Providing a unique perspective on a complex subject, the talk outlines what a contemporary managerial intervention on culture should entail in an age of extensive risk management constraints on decision-making.