Do we need more regulation? — The cases of Signature Bank and SVB

Compliance, regulation, laws — how to deal with them?

Once again, banks are the focus of public attention.

Once again, states had to step in with tax money to provide liquidity to banks. Once again, many people are asking themselves how to deal with regulation and compliance in the future. Too strict rules can lead to the shutdown of operations and considerable damage to the attractiveness of a business location. On the other hand, being not strict enough can lead to a significant escalation of crisis events, as was already seen in the banking crash of 2008.

Photo by Tingey Injury Law Firm on Unsplash

How should your organisation handle this?


The current banking crisis affects several banks, not only in the USA. Signature Bank and Silicon Valley Bank (SVB) got into trouble. The USA stepped in as a state and secured liquidity. However, state aid was also necessary for Switzerland when the Credit Suisse share plummeted by 30%. The Swiss central bank provided almost 50 billion francs in liquidity and thus saved the organisation, which was considered the country’s most well-known banking asset.

The outcry in many places was loud and clear to hear. It was not unjustified. Shortly before their collapse, KMPG audited the SVB and Signature Bank books. Everything was certified to be in order. Incidentally, SVB’s CFO was formerly CFO at Lehman Brothers, the bank that collapsed in 2008. The CEO of SVB has been involved in lobbying activities aimed at loosening regulation (more on this in this week’s podcast — see below for details and links). He is thus rightly asked in many places what a sustainable approach to the issue of regulation should look like.


Nothing will work sustainably without regulation. Statements such as “only unregulated, free markets work” shows nothing but the bouquet of brute ignorance of the person uttering it.

Concerning compliance, always ask yourself a few questions. Is there social equivalence, i.e. could the person also afford a possible invitation (e.g., to a sports event)? Do you have a buddy syndrome, i.e. the controlling persons and units are colleagues, and no serious control is taking place at all? Do you see behaviour where some people are self-confident and intransigent despite faulty behaviour because they consider themselves irreplaceable or difficult to replace?

In more detail, please examine your organisation with a few more questions. Which positions carry the most significant risk in your organisation? Do you have (value-contributing) networks, or is cronyism based on personal preferences common practice? How often is a structure justified with “historically grown”? How often do you hear the phrase “we always wanted to get started, but never managed it”? Long story short, ask yourself: how much arbitrariness versus evidence-based and rationally justifiable processes exist in your organisation?


It remains crucial that you do not unnecessarily restrict your organisation. Finding the right balance takes work, but this is the task of professionals, especially managers and executives. Freedom is always the right choice where it is necessary and possible.

Regulation is necessary where you:

1) can harm the organisation,

2) can harm the people in the organisation or

3) can cause harm to uninvolved third parties through your actions.

In addition, always bear in mind that your control departments and the people working there must be professionally competent. At the same time, they must deal with not wanting to be popular personally (and the fact that they never will be). Therefore, during the recruiting process, consider suitable personalities for these positions. Paying attention to these aspects can further develop your organisation and contribute to sensible, goal-oriented regulation. Such regulation offers sustainable help and protection to the organisation, the people working there and third parties.

Listen to more about compliance and regulation in this week’s podcast: Apple Podcast / Spotify.

Do you care about excellent regulatory and compliance leadership?
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Network: Niels Brabandt on LinkedIn.



Niels Brabandt
Leadership Magazine by Niels Brabandt / NB Networks

Niels Brabandt is in business since 1998. Helping managers to become better leaders by mastering the concept of Sustainable Leadership. Based in Spain & London.