The Government needs to get realistic on pay for competent regulation of the banking and financial services sectors
Sensible regulation of the financial sector has got to be a good thing. No one wants a repeat of the 2008 crash.
But one thing worries me: the way the Government insists on greater regulation but seems unwilling to pay the going rate for the people to do it.
Unless the new regulatory regime is properly funded with salaries that are competitive with the private sector, it ain’t going to work.
After all, what investment banker worth his salt is going to turn poacher turned gamekeeper when it amounts to a drastic cut in salary?
Headhunting firm Hedley May estimate that the Financial Services Authority would need to increase its budget by more than a third to attract and retain quality staff.
We’re finding the same problem at CareerBalance. People are interested in going into the regulatory sector. But if it means taking a major pay cut in already rocky economic environment, they feel they can’t afford to do it.
The right pay for the right people isn’t just an issue for the FSA. Governance, regulation and risk management in sectors such as law and accountancy call for the very best minds to prevent fraud and ensure businesses avoid reputation-damaging investigations, costly litigation and hefty fines. Employers unwilling to pay the very best salaries are ultimately shooting themselves in the foot, as we have seen in the case of Barclays, Goldman Sachs and PWC.
It’s understandable that in a time of austerity the Government feels the need to bear down on public sector pay. But if new regulation proves ineffective and the financial rewards stay stacked in favour of risk-taking, the British economy won’t prosper in the long term.
