Dubai FSA: Regulators pay must equal private sector

Author: Ashley Lee | Published: 16 Jan 2013
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Regulators attending this week’s Asia Financial Forum predicted an increase in private sector recruitment this year and called for new hires to be paid on par with the private sector.

Regulatory panelists in the Dialogue with Regulators session said they expected to see an increase in private-sector hires going forward as financial products grew more complex.

The regulators noted there was now much more movement between the public and private sectors. Career regulators are becoming a rarity.

The chairman of Dubai Financial Services Authority, Saeb Eigner said he had seen regulators shift to hiring people from the industry and the private sector in the last ten years. He added that financial products were becoming more complex, and that there were now more of them.

“To expect regulators to be always ahead of the curve is really very challenging and almost impossible,” he said. “You need to recruit from the private sector, and then you have to pay as they do in the private sector.”

Greg Medcraft, chairman of the Australian Securities and Investments Commission (Asic), agreed. He said that it was important to hire staff with industry experience and expertise so that regulators were on a level playing field when dealing with industry. He also supported recruiting a diversity of skills into regulatory authorities.

Delegates at the event, however, expressed fears regulatory hires from the private sector would encourage cronyism.

But Medcraft said former investment bankers recruited into Asic were usually more cynical than normal regulators. “It’s almost like poachers turned gamekeepers; they’re more religious than anyone else,” he said. “They can actually see through some of the games that are played.”

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