As we developed our research programme for the first phase of this project, our working definition of Conduct Costs evolved, informally, as the experience of research brought up various questions for "in or out" decisions. The working definition is reflected in the Overview of the Project set out in this blog. Defining Conduct Costs is important because one of our objectives, as regular readers will know, is to persuade banks to report Conduct Costs voluntarily. We sense that many of them, in principle, would not be opposed to this although none is terribly keen to be first mover. Another factor which may be inhibiting banks is the question of whether there is yet sufficient consensus as to what Conduct Costs actually means.
Conduct Costs: Definition and Reporting Issues, by Roger McCormick