Bounding along in the lead of "The Australian crisis" National Australia Bank has owned up to a litany of defects and an overload of corrective work around conduct and operational risk.Crisis: there is no hyperbole this time, it is a label selected by the industry thinktank the Group of 30 for its report "Banking Conduct and Culture: A Permanent Mindset Change."Gail Kelly, former CEO of Westpac, was one of the doyens of finance that helped produce an analysis in synch with the work of Australia's royal commission.Setting the scene for the overload of work ahead for the industry, the G30 observed "banks in markets that escaped the financial crisis relatively unscathed such as Australia have only more recently begun to focus on conduct risk issues. "In many of the areas assessed, we observed significant gaps between the leaders and laggards, with some institutions having made significant improvements while others still operate under the perception of 'it would never happen to us'."The local laggard under no more illusions is NAB, the bank on Friday compromising its reputation once more via excruciating disclosures."The development and embedding of a disciplined bank-wide approach to conduct risk  management has not happened with sufficient pace or urgency."Yes, NAB said that - in a report for APRA. Other banks may share corresponding reports this week, and all in response to the prudential report on CBA released in May.The bank's late record of ineffective and under-resourced risk management systems is documented in a self-assessment on governance, accountability and culture.Only as recently as 2014 did the bank "implement its Risk Management Accountabilities model that clearly defines the risk management accountabilities of First, Second and Third Line defence functions."In 2015 NAB developed a "single system of record for non-financial risks, including operational risks, compliance obligations and associated controls."Over the next two years NAB introduced "formal risk management performance assessments [and] formal mechanisms to measure, assess and report on the risk management performance of all business units.Related steps included the "redesign of NAB's risk governance model"  linking risk appetite to customer experience and also "improvements to NAB's risk appetite framework, providing clearer boundaries on risk limits."One key projects realised in 2018 included "strengthening of the credit, market and balance sheet risk management practices."Ernst & Young conducted a "comprehensive independent review of its risk management framework this year, their conclusions damning for a major Australian bank already reeling from disclosures at the royal commission.NAB's "risk framework is adequate and appropriate, and the application of the framework is partially effective", NAB said, extracting from the E&Y review.Capability or effectiveness gaps discussed in the self-assessment and a related list of fix-ups highlights the inward looking tone of the bank's overall operations at present.The tasks suggest NAB remains in catch-up mode as financial regulators harass the bank over conduct matters.For instance: "Ensure risk reporting brings appropriate focus to the impact of risks on customer outcomes and the bank's reputation."Critical compliance controls are in a worrying state, as exposed earlier last week at the hearings in