Trust is one of the most fragile elements of the banking system. It is built gradually, through relationships, reputation and credibility, but it can deteriorate very quickly, with consequences that extend beyond individual institutions to clients and stakeholders.

In the sixth edition of Leggere il presente, the SDA Bocconi Roma Book Club, the discussion on conduct risk highlighted how important it has become for the financial sector to preserve credibility through responsible behaviour, substantive compliance, a culture of integrity and conscious governance.

The discussion between Alessandro Carretta, Emeritus Professor at the University of Rome Tor Vergata, and Paola Schwizer, Full Professor of Financial Intermediaries Economics at the University of Parma and Affiliate Professor at SDA Bocconi School of Management, starting from the book Il conduct risk nelle banche – cause, effetti e mitigazione (Giappichelli) by Alessandro Carretta, Doriana Cucinelli, Lucrezia Fattobene, Paola Schwizer and Maria Gaia Soana, together with Pierantonio Zanettin, President of the Parliamentary Commission of Inquiry into the banking, financial and insurance system, Claudia Cattani, Chair of BNL BNP Paribas, and Sabrina Bruno, Full Professor of Comparative Private Law and Business Law at the University of Calabria, moderated by journalist Stefano Feltri, focused on formal compliance and on how, by itself, it is not sufficient to preserve trust.

During the conversation, Carretta and Schwizer reflected on the limits of an approach based exclusively on rules and regulatory requirements. Conduct risk can also develop within fully compliant organisations, when behaviours, incentives and commercial practices end up undermining clients’ trust and the credibility of institutions. For Schwizer, the issue concerns above all the quality of decision-making and organisational behaviour, which directly influence how a bank manages its relationship with clients and approaches risk.

The case of Credit Suisse, mentioned several times during the discussion, was identified as one of the clearest examples of these dynamics. Rather than a single mistake or isolated violation, some crises develop progressively within organisational models that weaken controls, governance and responsiveness over time.

Zanettin referred instead to the case of the Veneto cooperative banks and the relationship they had built over the years with families, businesses and local communities. In many cases, he recalled, those banks were perceived as stable points of reference and part of the economic and social fabric of the territory. When that trust breaks down, the effects go far beyond the financial dimension and directly affect local communities.

The discussion concluded around a shared awareness: the stability of a bank also depends on the quality of decisions, organisational behaviour and the ability of leadership to build trust over time. It is on this ground that reputation, integrity and the quality of governance directly influence the solidity of financial institutions and their ability to create long-term value.

Leggere il presenteis an ongoing series that uses books as a starting point for discussion of the transformations shaping contemporary Italy. To find out about upcoming events, visit the SDA Bocconi Roma events calendar. Visit the SDA Bocconi Roma events calendar.

SDA Bocconi School of Management