Morgan Stanley has formed a new conduct risk committee to influence culture across its Europe, Middle East and Africa operations, in what peers have described as an unusual move to address increased regulatory pressure to curb staff misbehaviour in the financial sector.

It comes as the UK regulator, the Financial Conduct Authority, ramps up efforts to ensure banks address the destructive impact of misconduct on institutional culture, or 'conduct risk'. The FCA has focused heavily on conduct risk since its inception in 2013, while US regulators have also begun emphasising the need for banks to address ethics and culture in recent months in the wake of a series of regulatory fines and scandals linked to misconduct in the banking sector.