INTERVIEW: keeping faith

Author: Lizzie Meager | Published: 28 Aug 2018
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Julia von Buttlar, deputy head of division in BaFin’s securities supervision directorate, discusses how cooperation is key when it comes to ensuring the integrity of the international financial markets

Please tell our readers about your career path so far.

Time has gone by quickly. I have been working at the Federal Financial Supervisory Authority (Bundesfinanzdiensteistungsaufsicht or BaFin) for nearly 17 years.

Having started in the supervisory department, I worked for several years in the international department and finally moved to enforcement, focusing on market abuse, short selling and breaches of financial reporting obligations. I have been the deputy head of the division since 2013, mainly dealing with administrative fines in the securities supervision directorate. The team comprises about 25 people, a mix of economists, lawyers, and individuals with operational and trading experience. My practice also includes all aspects of financial markets regulatory policy and enforcement involving the new sanctions regime in EU regulations such as the Market Abuse Regulation and Mifid II.

Under the responsibility of our head of the administrative offence proceedings division, Ralf Becker, and the oversight of our chief executive director, Elisabeth Roegele, who recently took on the role of deputy president of BaFin, I played a leading transversal role in drafting and implementing BaFin's guidelines on the setting of fines in administrative fines proceedings. Additionally, I provide legal advice and assistance as enforcement specialist from a national authority in the development of the European Securities and Markets Authority's (ESMA) newly-established Enforcement Network. The Network seeks to foster more consistent enforcement approaches and sanctions in the EU, and build up increased (and more consistent) protection levels for investors.

Constructive and reliable international cooperation is crucial to ensure the proper functioning and integrity of the financial markets

I believe that constructive and reliable international cooperation is crucial to ensure the proper functioning and integrity of financial markets, particularly where market supervision is concerned. As such, I have enjoyed being able to be seconded to the US Securities and Exchange Commission (SEC) to learn more about its approach on enforcement. The SEC is frequently perceived as one of the most powerful authorities, in particular due to the high penalties imposed and the large settlement amounts it has agreed. Authorities which are responsible for enforcing regulations now have a very considerable variety and range of enforcement measures at their disposal (ranging from inspection to support and advice), backed by criminal, civil and reputational sanctions, and in some cases the ability to achieve redress. How should officers aim to use these powers?

For me, it has been and continues to be a very rewarding experience to examine the theory and the practice behind how to influence corporate behaviour through regulatory techniques, drawing on the principal theories of deterrence, economic rational acting, responsive regulation, and the findings of behavioural psychology. In my opinion the way in which the rule is enforced should always be fair, proportionate and predictable. New research suggests that the real purpose of both rules and enforcement, ie ex ante and ex post regulation, is to affect behaviour between people. Fairness is the essential ethical component of human social interaction, since humans will adopt social norms where the rule corresponds to their internal moral value system, and where the rule has been made fairly and is applied accordingly.

This is why I feel passionate about also having the opportunity to teach students – this is very fulfilling. I teach courses including financial markets and securities law at the EBS Universität für Wirtschaft und Recht located in Wiesbaden. I enjoy teaching the most, by communicating with students to ensure they don't just learn about a topic but also understand why things work the way they do. It's an amazing experience to interact with the new generations. By sharing my knowledge I can help shape the next generations' future careers.

I am also involved in a network that connects current and former female scholars of German foundations such as the Cusanuswerk or Konrad Adenauer foundation with top female managers and female leaders in all other areas of German society. Women engaged within this network want to contribute to society in return for the benefits they received themselves at some point in their lives. There is so much high potential within this group of talented women who are willing to bring their ideas together in order to make the world better. This is really inspiring – on a personal level as well. I used to be a professional tennis player, and I was taught to be competitive. Looking back, I think this mindset can destroy creativity, it's far more constructive to compromise, to be flexible and cooperative.

  • First and second state examination in law, Mainz
  • Diplome intégré de droit franco-allemand des affaires, Université de Bourgogne (Dijon)
  • Master of Laws (LLM), Duke Law School (USA)
  • PhD in law and political science, Technische Universität Darmstadt

You have worked both in private practice and in the public sector. Why and how did you decide to work as a regulator?

I had no clear career path in mind when I started studying law but it was clear to me I wanted to work in an international environment. Along the way, I developed a better understanding of what I wanted to do. I initially studied law in Germany, and later completed my degree with postgraduate diplomas in France and in the US [see boxout], including an LLM at Duke University, where I was part of the overseas exchange programme. The programme solidified my expertise in international business law and stimulated my interest in the dynamics of international law.

Writing my doctoral thesis then made me realise I wanted to work as a regulator. My dissertation was entitled 'From a grey to a white capital market,' and focused on the harmonised supervisory regime for investment firms and banks that came into effect in January 1998. The rules are designed to prevent any disruption to the smooth functioning of the banking system or to the economy as a whole. I received two awards for my thesis, in which I argued that while the new rules have been a step in the right direction, further reform may be needed to supervise financial intermediaries. This question is a still a hot topic and might be subject of a recent legal initiative as provided for in the German government's coalition agreement.

This may sound a little bit profound, but the idea of protecting the financial market is absolutely what motivated me to work in the public sector. I love my job, and the brilliant and fascinating people I work with. BaFin's strength lies in the fact that it covers every aspect of the financial market in the context of integrated financial supervision. It has excellent connections worldwide, and is a valuable point of contact for market participants and other supervisory authorities.

A career with BaFin therefore offers a job that is exciting, challenging and meaningful to me. BaFin is more than a workplace. United by a core set of values, its staff members play a critical role in ensuring the proper functioning, stability and integrity of the German financial system. It's a challenging environment to work and learn with the nation's experts. Working on innovative, cutting edge issues and an opportunity to make a difference for investors in Germany are also things I really appreciate about working in the public sector.

Have you encountered any challenges being a woman in a senior role at any point throughout your career?

At the close of 2017, women accounted for over 47 % of the total staff employed within BaFin.

I started off at BaFin's international division. When my first son was born I took a break from my career. I was nervous throughout my maternity leave about whether I would be able to continue doing international work, especially considering that I needed to travel a lot for business. As I restarted working life, I went on to a different line of work at BaFin's administrative offence proceedings division. I didn't predict it but I am grateful I was given the opportunity. I was surprised at how much I enjoyed enforcement work. This role broadened my professional horizon, and I learnt to work across the different specialised divisions of securities supervision. Each supervisory division responsible for certain securities law obligations or undertakings can submit objective breaches of provisions subject to fines to the administrative offence section. A breach of provisions will be recorded by each supervisory division itself as part of their supervisory activity. It will then be handed over to the administrative offence division in order to have it evaluated in terms of whether there is initial suspicion that an administrative offence has been committed. If so, it will be subject to the imposition of sanctions or administrative fines. The diversity of rules to be processed in the cases passed on by the departments requires a very high level of knowledge and detail which has allowed me to really focus.

Protecting the financial market is what motivated me to work in the public sector

But given that I have three sons, ages 14, 12 and eight, balancing work and family can be a real challenge. Well, of course my husband, who is a successful lawyer too, is indispensable to my career success as are my own drive and determination. I believe that choosing the right life partner who will step up to do what it takes to support your career is essential to fulfilling your professional ambitions and having a family at the same time.

The landscape of work is changing. I'm confident that we can change our point of view so that both men and women can fully play a part in their family life as well as use their full talents on the job. I didn't come to the realisation that men need more choices in my professional life but as the mother of three sons. Being a full-time or part-time father is just as much an option for them as it is for women. Some workplaces such as BaFin allow employees to shape their own working environment together with their supervisors. It is a great advantage that BaFin has put in place many great policies to make balancing work and family easier.

For example, BaFin offers tailored part-time working arrangements, a modern flexitime agreement and a telecommuting job quota. It strives to create a family-friendly working environment by making it easier for its staff to combine their professional and family lives. It's a particular plus that people who worked part-time were promoted to leadership positions. I was delighted that working part-time for a certain period of time did not put me off the track of promotion. The more men also make use of such flexibility, the more equal women's role in business society will get.

Are there some issues that have not been addressed yet when it comes to the role women play in the workplace?

We often struggle to make the right choices for ourselves, for our career or for our family. I assume this is something everybody faces or has gone through. I believe it's important to identify priorities for ourselves, at work and at home. It is important to distinguish between the aspects of a job that are truly necessary and those that are not. The challenge is to find a balance. The right question is not 'can I do it all?' but 'can I do what's most important for me and my family?'.

Sometimes the situation is hard to read and the lines are hard to draw. I have applied the 80/20 principle throughout my life to help manage my professional and personal lives. The principle is named after Italian economist Vilfredo Pareto, who found that 80% of income in Italy was received by just 20% of the population. From there it was assumed that the results in any situation can be traced back to a small number of causes. In other words, 80% of consequences stem from just 20% of the causes. In reality though, it doesn't matter what numbers you apply – 80/20, 75/25 or even 90/10. What really matters is understanding that a smaller percentage of the activities you carry out is responsible for your success and prosperity. Based on this, you have to make up your mind to do something and follow through. Applying the principle works well and will you give great results.

Do you have advice for women in the workplace?

I would give the same advice to men and women. Technology is also changing the emphasis on strict office hours since so much work can be conducted online. Being able to work online anytime and anywhere is a key success factor for businesses these days, saving time and money and ensuring responsiveness. We are in an arms race where outside distractions compete against what's going on inside.

If we think of our mind as a computer, the RAM can get full sometimes so it's best to shut it off for a while and restart. This could be by walking, meditating, doing yoga or any other activity that takes your mind off work. Personally I have found out that I am much more productive and happier if I take care of my mental and physical wellbeing.