JPMorgan Chase recently agreed to pay $13 billion to settle the Justice Department's investigation into its sale of troubled mortgage-backed securities in the years leading up to the financial crisis. The settlement, staggering in size and scope, serves as another chapter in a series of attempts by the bank to put their past behind them.

Earlier this year, JPM had to agree to certain wrongdoing and pay other large fines to settle regulators' allegations related to its now-infamous $6.2 billion "London Whale" trading loss. U.S. officials also filed criminal charges against two former JPM employees for allegedly concealing the reckless, outsized derivatives position.

Since 2010, global regulators have raised the stakes to clean up the financial services industry. The U.S. passed the Dodd-Frank Act, introducing new regulatory agencies and enhancing existing oversight. The Basel Committee on Banking Supervision agreed on soon-to-be-implemented revised capital rules. The G20 nations formed the Financial Stability Board to coordinate financial regulation among national authorities and the London interbank offered rate is in the process of overhaul.

So, is the economy safe from the past mistakes and current practices of the global banking system? Hardly.

Speaking at a global finance conference on Sept. 23, Colm Kelleher, the head of the institutional securities business at Morgan Stanley, acknowledged "the biggest issue has not been resolved, which is 'too big to fail."

If we are to truly prevent large financial firms from posing a systemic threat to global economies, the industry needs to step up and institute significant self-imposed reforms. To regain credibility, business leaders need to agree upon and stand by some uniform standards. To get there, a few things need to happen.

First, large banks must get serious about defining "too big to fail." Since Dodd-Frank's passage, global regulators have worked to establish how they would take down cross-border hurdles to dismantling an international firm in the face of a crisis. At a recent Institute of International Finance event in Washington D.C., a senior bank official from the Bank of England who has been working with U.S. regulators said, "I think U.S. authorities could do it today – and I mean today."

Indeed, officials at the Federal Deposit Insurance Corp. maintain that the U.S. is prepared to take down global banks. Under Dodd-Frank's "living will" provisions, banks have the authority to create their own parameters and reassure authorities that they can unwind themselves. Global banks, however, have yet to complete their plans. They should collectively make doing so a priority.

Second, senior-level executives need to hold each other publicly accountable. When the big "London Whale" settlement was announced, U.S. Attorney Preet Bharara said "capitalism works best when its captains do not lie and cheat." I'm opposed to verdict without a trial. However, from time to time, industry peers should not refrain from calling out senior level executives for the bad behavior of their direct and indirect reports. The JPM rulings were groundbreaking in their astronomical fines and in their insistence that the bank admit it acted recklessly. Whether it is in front of regulators, prosecutors or the media, accountability is necessary and effective.

Finally, industry executives need to re-teach ethics training among senior-level executives and within the rank-and-file. In the case of the "London Whale", the global economy was lucky – tips from a few anonymous fund managers brought the dubious practices to light. However, encouraging ethical decision-making is far from pervasive in the finance industry. In teaching business principles to MBAs, Pepperdine University places tremendous effort and emphasis on discovering personal values that align with ethical behavior. Our desire is to send off finance professionals into the industry with a sense of duty to act when an internal alarm bell suggests decisions or circumstances have gone wrong. Much like medical, legal and government lobbying industries, regular management training should be an industry requirement.

In fact, professional credentialing through the Chartered Financial Analyst Institute requires charterholders to uphold and abide by a strict professional code of conduct. The CFA Institute has codified 50 ways in which to restore trust in the financial industry. This list suggests elevating the importance of integrity in the hiring process; engaging with state and local regulators to self-monitor industry practices; establishing a mentoring program that includes guidelines for protégés and advocating for technology that improves transparency in fees. These or similar principles should be a routine part of professional development training in the finance industry (and, yes, also in MBA finance programs).

Heretofore, the individual and institutional "captains of capitalism" have little deterrent in radically changing business practices. Now, in the wake of even comparatively future minor infractions, regulators are primed and ready to put major restraints on the industry. Those in the industry would likely agree self-imposed and enforced rules are better than government-imposed ones. As such, they should take it upon themselves to strengthen their firm's safety and soundness and improve corporate culture.

John Paglia is finance department chair at Pepperdine University Graziadio School of Business and Management.