EDITOR'S TAKE: Make jobs in financial services mandatory

2 October 2009

2 minute read

EDITOR'S TAKE: Make jobs in financial services mandatory

Some of the finest minds in financial blogging have focused their attention on the dual issues of wild bankers and submissive regulators, and they have come to the same conclusion: invoke the draft.

Fintag, a hedge fund blogger equally known for his doodles, ran a post a few weeks ago suggesting that the best way to empower the regulator would be to oblige bankers to work there.

The FSA already allows bankers to work there on secondment, but it doesn't force them to. If wholesale financial services professionals were obliged to rotate through the FSA every few years, the regulator might get a higher calibre of talent.

Clearly, there would be a danger that those professionals would come out with intimate knowledge of how to avoid regulation, but this could be mitigated with electric shock therapy after each period was over. Alternatively, it might be hoped that a few months at the FSA would imbue participants with a sense of regulatory fulfillment and moral purpose that would make gaming the rules unthinkable.

Failing this, it would also help to mandate all students with a 2.1 or above from a top 5 UK university to work in financial services for at least 18 months post-graduation, and to carry on doing intermittent 12 month stints in banks for the rest of their working lives (or until they are unable to focus on a computer screen).

This would give the population at large a better understanding of banking. It would also render it a deeply unsexy career and restore financial services to the utility status so loved by the likes of Adair Turner. And it would force banks to employ significant cohorts of English students and left wing types with no interest in making money and limited understanding of complex derivatives. Mortgage mis-selling, excessively large bonuses, and CDOs would become things of the past.

Chris Gillick, a former editor of Trader Monthly (before it went bust) has a similar draft-style suggestion on his blog, 'American Madness'. However, his is rather complex and involves football. We think our FSA/lifetime bondage combination is the best and are waiting for the Monster Raving Loony Party to add it to their prospectus for the next election.

AUTHORSarah Butcher

Global Editor

An
Anon
5 October 2009
I agree with Giles. Talent is clearly not the main issue. It was a distinct lack of talent in the banks (especially at senior level) that led us to this precipice, and anyone who thinks that frontline FSA staff are not, on average, as highly-educated and capable as bank staff is deluding themselves. "Perhaps" they just have a more challenging job than the so-called money-makers?
Either that or they have a vested interest in making themselves feel superior through dint of their own banking experience. SB take note please.
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gi
giles
4 October 2009
No, put the regulators on the trading floors. How else can they get the knowledge they need ? Give them the powers to hold every trader accountable for their actions at the point of each trade. Just their presence alone would ensure complicance.
In fact why not go further. A certain proportion of the new recruits that each bank take should be FSA employees unbeknown to the bank employees. A sort Gestapo for bankers.
Talent is not an issue. There is little talent in investment/gambling. There are winners and there are losers. We need to ensure the losers don't bring the roof down.
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ma
maggie
3 October 2009
I find the arrogant, misleading slant of the article unworthy. Superficial attacks on regulators (knowing well that they cannot hit back in public) do not help the industry without revealing the true reasons for their so-called lack of talent: political will, often weakened by too much courting from you know whom.
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An
Anon
3 October 2009
Fintag's musings might carry more weight if he really were a hedge fund manager. More blagger than blogger, I'm afraid...
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Do
Dominic Connor, Headhunter
2 October 2009
After near-universal conscription in World War 2, we had the biggest growth in crime in history.
You will have thousands of people who feel that a chunk of their lives is being stolen from them, they will be tough to manage, and no one will even try.
Also, secondment is too easy to corrupt, think it through...
You work for fim A.
Firm B is a direct competitor.
You get inside info on firm B.
Think of the fun you will have.
Then you find that you can arrange for harm to come to firm B, or the jerk that made you redundant.
That happens of course anyway, but relatively rarely, but the flip side of conscription is you have to take *everyone*.
Not wishing to sound too much like a headhunter, but if you pay peanuts, and reserve all senior roles for white male arts graduates then you will have an organisation as dysfunctional as the regulators.
you want better regulation, get out your chequebook.
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