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 @fsa.gov.uk.
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