ABSTRACT

This chapter investigates how one small and one large bank have responded to the increasing regulatory pressure. Our empirical interest is directed toward the Swedish banking industry, the structure of which has changed considerably over recent decades. The top management in Small Bank is much more involved in the operative work, and the same actors decide how to handle the regulatory pressure and manage the consequences of their decisions when performing risk and control work. In order to understand the responses, it is helpful to first juxtapose the relationship that each of the two banks has with the regulatory authorities, which respondents describe as being completely different. In Small Bank, the respondents recognized that simply increasing the workload on the bank's current management staff is not sustainable. The chapter summarizes the two banks that were initially skeptical about the new regulatory pressure. It explains how the isomorphic pressure of regulation may threaten diversity in financial markets.