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Should ex-regulators be allowed to work for big banks?

Sam Dale MM blog

In the United States financial services lobbying is even more intense than here with the biggest firms funding entire presidential campaigns.

The top five contributors to Mitt Romney’s 2012 campaign were Goldman Sachs, Bank of America, Morgan Stanley, JP Morgan and Credit Suisse.

No one believes these firms donate millions of dollars simply because of a political allegiance with the candidate. They want something in return.

The same is clearly true for Barclays when it today appointed former FSA chief executive Hector Sants as head of compliance and regulatory and Government relations.

Barclays wants Sants to use his knowledge and relationships with the regulator to its advantage. Sants quit the regulator in June but remains on the payroll until the end of this month with his £500,000 salary plus benefits.

Is it right that a senior regulator of such stature and influence is allowed to immediately move to one of Britain’s biggest banks to manage relationships with his former staff? Could he have been thinking about his next move while still in his FSA job?

Under current rules there are real questions to be asked about the appetite of regulators to take on the big firms when they could be building a barrier to their next highly paid job.

Comments on the Money Marketing website leave little doubt as to many advisers’ thoughts, with the move branded as a “joke”, “disgrace”, and “sickening”.

Sants is not the first, nor likely will he be the last, to move straight into a highly paid and influential financial services related role. Former FSA director of enforcement Margaret Cole joined PricewaterhouseCoopers after leaving the regulator earlier this year. Former FSA managing director of supervision Jon Pain also joined KPMG last year.

Unlike Government ministers there are no rules governing the next move of FSA staff. In 1997 the FSA was created as a non-Governmental body, despite using the email address

Government ministers are banned from taking lobbying jobs in their specialist area for 12 months after they leave office.

For two years after office they must also have all private work cleared by the the Advisory Committee on Business Appointments.

Lansons Communications head of regulatory consulting Richard Hobbs says: “Common sense tells you that the FSA chief executive and chairman should be subject to the same rules and restrictions as Government ministers.

“They have remit of such a profound and influential nature that the same rules should apply but they don’t.

“I look forward to Sants giving evidence to the Treasury select committee. They are going to have lots of questions.”

A spokesman for the TSC says there are no current plans to call Sants in for questioning but you would have thought this is something MPs would want to look into.

In the United States radical proposals are emerging to stop regulators moving into high profile, well paid bank jobs.

Earlier this year Federal Deposit Insurance Corporation. chairman Sheila Bair called for a blanket ban on regulators taking private jobs.

She told American Banker: “I think that should be a lifetime calling. Pay them more and train them more and give them more status, but in return, expect them to make a lifelong commitment.”

Clearly financial regulators need to make a living and any such ban would likely end up in the European Court of Human Rights.

But perhaps some basic time limits similar to those applied to Government ministers would be appropriate for such prominent jobs.

Samuel Dale is political reporter at Money Marketing


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There are 27 comments at the moment, we would love to hear your opinion too.

  1. On the plus side, at least he is accountable to someone now.

  2. No – they should have a period of 2 years before they can move – just like government ministers do. This potentially removes the stench of corruption.

    They should also be forced to see through any big projects that they introduce at the regulator. Sants should not have been allowed to walk away from the RDR. He should have been made to stay to see it through to the bitter end.

    Doubt anyone would want to employ him if that happened. I predict his FSA work will not go down too well when the public/press etc find out what has been going on during his watch.

  3. Should definitely be a ban of a year or more, otherwise it really is just a joke and a sickening gravy train, doing nothing for the reputation of regulator or indeed the new employer.

    Mind you, if you are Barclays you have no reputation to worry about; Satan would look saintly.

  4. NO – it only strengthens the pro-bank lobby.

  5. It’s by far and away the best way of ensuring that one’s grossly inflated package paid for by the public purse and the poor bl**dy infantry, is maintained and supported by a combination of the taxpayer and OPM (other people’s money).

  6. Arrange these words in the right order for a big cash prize!






    Kerrchinggg!!!!! Fill yer boots hector.

  7. Surprised that Barclays would take on someone so arrogant and yet, incompetent.

  8. The movers and shakers at the FSA/FOS/FSCS and other quango’s are career ladder climbers.

    Their self-serving actions point to there regulatory tenure as being a mere tick on their CV prior to moving on to better sinecures.

    Rather than purging the industry perhaps they should look closer to home and purge themselves of this devious and high profitable tendency.

  9. This stinks, he was in charge when Barclays got their Libor fine and the deal with the banks for the mis-selling of interest rate swaps……. HSBC get fined £1.2Bn Barclays gets fine a pittance in comparison….. Can’t trust the banks, can’t trust the regulators. Who can you trust.

  10. I’m amazed any bank would even consider the likes of hector Sants considering his poor skill set, arrogance and damage to financial services under his watch. The fact he had the position he had shouldn’t qualify him for any other finance related position when he’s as useless as he is. I enjoyed that.

  11. Gamekeeper turned poacher, what a joke!!!

  12. It will be interesting to see the path that Barclays take next with their financial planning division because if anyone knows how to position a firm to take advantage of RDR it should be the man who helped create it.

  13. It is unusual for a regulator to be so universally despised. Some would think that the hatred is a direct result of being a tough regulator. The problem is that Hector is a unique combination of arrogant yet ignorant, educated yet incompetent, he is an industry vandal and a menace. He will no doubt be able to influence the fSA, an detached organisation that is hated beyond measure.

  14. I am so angry about this. These so called ex regulators are out of touch with the ordinary hard working people they are supposed to be serving in the interests of ! this is another gravy train for these people. Life in London is a world away from the rest of the country Canary Wharf is even further out touch with the ordinary people.I am sick & tired of over regulation within a Dictatorship called FSA.

  15. I will close my Barclays Business account and quote Hector. Its a pointless gesture but it makes me feel better.
    Costa not Starbucks
    Yahoo not Google
    John Lewis not Amazon
    Trouble is I hate all banks.

  16. There should be a two-year break for anybody in a control function within the FSA taking up a position in a private firm but for the Chairman and chief executive there should be an outright ban and their pension benefits should be the same as the Lord Chancellor to make it position where it is unlikely for these individuals picked to be corruptible. The position should also be funded by government and not the industry that is set up to regulate, break the link between industry and the regulator so nobody in the industry can corrupt them.

    Tony Blair took up a position with Merrill Lynch as a non-executive paying a salary of £1.5 million a year straight after his period of two years I wonder what promises he did for that part-time position

  17. NO !!!

    You only have to look at the long list of people move to top posts at the likes of PWC, KPMG various banks and Dubai

    In an interview Rory Percival replied to a question “how long do you think you will stay at the FSA” he replied, a couple of years retire, and look for a non exc postiton at a big company

    I think proof enough that these people abuse the posts they have as a springboard to satisfy thier own greed, with little regard to the mess left behind.

  18. It certainly brings into question the competence of Barclays management if they look at his track record…..if that is, I did say if!

  19. Hector was a banker before we went to the FSA as far as I am aware he did not do any work at the FSA. Now he has gone back to banking good ridance.

  20. I suspect this serial incompetent will still have the key to the executive washroom in canary towers, just as he will probably have a direct line to the FSA chief exec installed, just in case he needs to talk to few of his old cronies, because ‘he has a problem at Barclays that he wants ‘fixed’.

    It’s like something out a bizarre nightmare

    Am I dreaming this or will I wake up?

    Sadly this is the man who has created the nightmare…… and we are all living it….constantly.

  21. Clearly financial regulators need to make a living and any such ban would likely end up in the European Court of Human Rights. Clearly IFAs should be entitled to make a living and not have it threatened by the FSA and RDR without just cause.

  22. PS

    Please rank the items below in order of how much ‘the whole thing STINKS’ with the least smelly at the bottom and most smelly at the top

    Decomposing blue whale washed up on a beach at Sharm al Sheikh … in August

    Exploded anarobic digester on a massive pig farm

    The news of dear hector

    Open sewers of the Calcutta shanty… during the hot season

    ….I’ll leave that with you good folk.

  23. I hold to torch for Hector Sants whatsoever and in fact think large parts of his tenure at the regulator were undistinguished.

    But I also think people forget that for many years before joining the FSA Sants was a senior director in various banks, including Credit Suisse. Indeed he was earning more BEFORE his time at the FSA than when he was employed there.

    So are most people commenting on this article seriously suggesting that someone in his early 50s should never work in his chosen career again? Or that he should wait two years before resuming his career? Mad…

  24. Nic, I’m surprised you can defend this appointment. Yes on the surface putting a regulator in to sort out a banks issues might seem a good idea, but looking at past events and timings makes the whole thing stink!

    I think this quote sums it all up well:-

    “Mr Sants attempted to resign from the FSA in early 2010, some months after the CFTC forced the FSA’s hand to get involved in the LIBOR investigation. How and why he was convinced to stay remains a mystery. He then resigned again in March 2012 within weeks of Angela Knight of the BBA both of whom must have known exactly what was coming some months later. His last day at the FSA was the end of June just as the LIBOR scandal hit the press. In this way he avoided questioning from the media and the Commons Select Committee for his part in this whole sorry saga. Surely, this is the most infamous case of gamekeeper turned poacher in the history of finance. If we may for a moment equate investment bankers with poachers and the FSA with gamekeepers then not only is the head gamekeeper being hired by a gang of poachers for a lucrative salary after spending 5 years on the estate effectively not catching even a single poacher but he is being hired by them to argue to the new gamekeeper that they aren’t poaching. There are serious questions to answer about not only whether he is a fit and proper person to work in finance if he does not see this as a prohibitive conflict of interest but also whether he was ever a fit and proper person to hold the position of head of the FSA.”

  25. Peter Herd | 12 Dec 2012 4:51 pm
    For the first time I agree with your comment Peter????
    Hector Sants was / is an incompetent and rather than obtaining a plum / lucrative job with Barclays should have been barred from holding any position in financial service – a judgement often handed out by the FSA for lesser reasons Br Hector Sants and the FSA.

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