Mr. Gerry Cross:

This is a question that has also had to be wrestled with to a degree in the UK. We cannot just say everything will be fine in this regard. It is a context we must think about as we implement the framework. We do three things that are relevant to how it will work effectively. We call out the senior executive functions, such as the chief risk officer, the chief credit officer etc. We state the inherent responsibilities of those functions, such as what the job of the chief credit officer is. Separate from all that, we stipulate a list of responsibilities that must be ascribed to people within a bank. That is to ensure there cannot be any gaps.

I think a firm that tried to game the system to its advantage by putting a person in charge of credit but without giving him or her the title of chief credit officer would quickly end up with two problems. First, there would be a mismatch between the inherent responsibilities of a role and the name of a role. I do not think it would work. If such an attempt was pursued, however, that would be one of those instances where we would immediately say there was a problem with the governance and culture of the firm concerned. It would be possible to see the mismatch between a more junior person holding the title in question and the more senior person really making decisions. That would set off alarm bells everywhere and we would quickly be saying we must intervene.