The UK financial industry regulator, the FCA, introduced last summer a hold over from the FSA days (though this usually followed an unsatisfactory Arrow Review in those days) called Enhanced Supervision. Such a blunt governance tool may be used with banks with serious failings of risk cultural, ethical, or governance standards.
Typically, banks or other regulated firms will have been found to have failed numerous standards over numerous times in order for this regulatory state to be imposed by the FCA. Interestingly, the regulator may impose Enhanced Supervision if it feels the Board of Directors is failing it its duties to carry out the degree of risk governance or promoting cultural values required of finanical institutions today.
Folks interested in this area of study couldn't do better than check out NYU Stern Professor Ingo Walter's paper entitled "Reputational Risk in Banking and Finance: An Issue of Individual Responsibility" published in the Journal of Risk Management in Financial Institutions, Vol 7(3) in January 2014.
Regulated firms subject to Enhanced Supervision will need to agree a plan, often at the Board Level, to remedy processed deemed by the regulator to be insufficent. Such plans may be proposed or implemented by external, independent parties determined in part by the regulator.
I envision seeing this blunt instrument being used more by the regulator given the direction and number of regulations now being imposed upon financial firms and banks. As reported in the FT on January 31st 2015, Deutsche Bank's London operations is now subject to Enhanced Supervison by the FCA, a signficant action by the regulator.
More on Enhanced Supervison can be found on the regulator's website at http://www.fca.org.uk/news/tackling-serious-failings-in-firms.
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