Novel approaches to the regulatory control of financial services providers: The importance of cultural context

This study investigates the effectiveness of a public sector financial management initiative. Specifically, the powers awarded to the Irish Financial Services Ombudsman (FSO) in 2013 to name and shame malfeasance by financial service providers (FSPs) in its annual reports. As the first country to award such powers to its public sector financial ombudsman, Ireland represents a novel setting in which to test the impact of regulatory disclosure as a way to promote accountability and transparency. Our results show that the number of complaints lodged against malfeasants dropped in the immediate aftermath of this and, following a one-year lag, so did the percentage of complaints lodged that proceeded to a full investigation and legally binding finding. Despite the failure of such strategies in some jurisdictions, the Irish experience indicates that regulatory disclosure can, in line with Neo-Durkheimian institutional theory and consistent with the accounting and accountability literature, have considerable impact where and when contextual preconditions are met. These findings have important implications for the operationalisation of regulatory disclosure as an accountability enhancing measure in other jurisdictions.