Regulator who championed bans on regulators joining banks takes top role at Santander
A former head of the Federal Deposit Insurance Corporation (FDIC) who previously championed the cause of banning regulators from taking jobs in firms they previously regulated, has performed an extraordinary volte-face and joined the board of one of Europe's biggest banks.
Sheila Bair said in an emailed statement:
I hope that my service on the Santander board will provide yet another avenue for continuing my commitment to reforming the global financial system and contributing to a safer, more responsible and customer-oriented banking system.
As head of the FDIC during the financial crisis Bair had an insiders' view of the worst economic crisis this century. A high-flyer in the financial world, In 2009 she was named by Time Magazine as one of the 100 most influential people and topped the Wall Street Journal's 50 women to watch.
In 2012, Bair received widespread praise for her book, "Bull by the Horns: Fighting to Save Main Street from Wall Street and Wall Street from Itself." Pulitzer prize winning Washington post columnist Steven Pearlstein described her as "everything you'd want in a public servant."
Bair took aim at the revolving door system permeating the financial world, which sees regulators walk into high paying jobs with major financial institutions they have previously regulated. In her book, Bair left no mystery as to what the solution to this problem should be:
I would like to see financial regulation be viewed as a lifelong career choice – similar to the Foreign Service – rather than a revolving door to a better-paying job in the private sector.
There should be a lifetime ban on regulators working for financial institutions they have regulated.
Bair's decision to take on a top job at a multi-billion dollar bank has led to charges of hypocrisy being levelled thick and fast. It could be argued that she has not in fact gone back on her previous statements because the FDIC wasn't the main regulator of Santander's US operations and the bank she is joining in Madrid is overseen by European regulators.
However, this rationalisation may be a stretch too far for those of a more cynical disposition.