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Wheatley defends FCA’s revolving door into private sector

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FCA chief executive Martin Wheatley has defended the number of high profile staff who have left the regulator to join the private sector.

Following a keynote speech at the Lansons Future of Financial Services conference in London yesterday, Wheatley was asked for his view on FCA employees joining regulated firms.

He said it is beneficial for the FCA to recruit from the industry, and for staff to take their knowledge into the private sector.

Wheatley said: “We work in the middle of the financial environment in Canary Wharf and we recruit our people from the industry.

“We know that people have a career and will want to move on. Our approach is that when somebody is leaving to a role that creates a conflict, we remove the conflict immediately by moving them to other duties or placing them on gardening leave.

“But frankly I think if there was a situation where you didn’t have any interchange between the firms that are regulated and the regulator, we would have a much less rich understanding of the issues we are facing.”

He added: “There will occasionally be a move that people raise their eyebrows at, but that is a price worth paying for having the right expertise, and we hope people leave us with a good understanding of our expectations and take those back into the industry.”

In March, former FCA director of communications Zitah McMillan, who stepped down in the wake of the Davis review, took up a senior role at payday lender DFC Global Corp.

Other prominent departures include former FSA director of conduct policy Sheila Nicoll, who left the regulator in April 2013 and joined Ernst & Young as a senior adviser six months’ later.

Former FSA chief executive Sir Hector Sants joined Barclays in January 2013. In November of the same year, he stepped down after taking a leave of absence due to stress. He has since joined management consultancy Oliver Wyman.

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. Julian Stevens 3rd June 2015 at 2:51 pm

    It would be interesting to know how many people leave the FCA to pursue a career as a financial adviser!

  2. So a head of the regulator that is tasked with investigating a major Bank for LIBOR rigging and then get a job with that major bank is OK.

    Vested interests come to mind!!

    It’s interesting that these rules only seem to apply to IFA and small regulated firms. Why are high paid jobs not seen as back hander in the same way as a golf day to an IFA firm or is it one rule for one and another rule for others.

  3. Derek Bradley 3rd June 2015 at 3:04 pm

    We should note that Government ministers are prohibited from working with companies their department may have had a relationship with for two years.

    For example, former cabinet minister Geoff Hoon had restrictions put on his business activities by the body set up to prevent politicians misusing their influence.

    The restrictions meant Mr. Hoon could not draw on any privileged information he was given during his time as a minister for the next two years.

    The Advisory Committee on Business Appointments (Acoba), which looks at the position of all ministers who take up jobs after leaving Parliament states that:

    “Under the Ministerial Code former Ministers who want to take up any appointments or employment for two years after leaving office are required to seek advice from the Advisory Committee, and must abide by that advice. Former Ministers are asked to complete an application form”.

    Mark Hoban did just that very recently.

    This protocol should apply to ALL those in high profile regulatory positions too and this should be a high priority for HM Treasury to put in place rules to stop such “bed hopping” that has the potential for a commercial organisation to benefit from the possibly highly sensitive knowledge and intelligence that Mr. Sants, Sheila Nicholl and Zitah McMillan have no doubt been privy to.

  4. I agree with Derek Bradley. It puts the benefit of that highly sensitive knowledge and intelligence in the hands of the highest bidder. Furthermore, where they go and work for a consultancy, that same knowledge and experience is shamelessly hawked around the very firms they were regulating only a short time before.

    I like and respect Martin Wheatley but this statement is ill-judged. It clearly impacts on him personally as well which means it is inherently conflicted.

  5. Again, this guy makes himself look as if he hasn’t thought through what he speaks about. Of course they’re not going to vote to kill the golden goose are they, and of course the opportunists will further their careers by hopping from one bed to another using their time at the FCA as a nice mark on their CV’s but its the damage they leave behind for other to contend with Mr Wheatley or don’t you see the paradox? Such as the RDR in it’s present format. Does anybody really believe this has sorted out what was perceived to be the problem? Thought not.

  6. When the commission ban was being recommended within the various RDR research papers the FCA stated that the problem was one of perception.

    I suggest that here we have a similar issue – the perception that ex regulators are riding the train (the wheels being lubricated by gallons of gravy) into well paid positions based on their inside knowledge – as opposed to innate skills and intelligence – and our fees are subsidising this process.

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