Financial Regulator who Railed against Revolving Door Takes Revolving Door Job with Major Bank
While running the Federal Deposit Insurance Corporation (FDIC) from 2006 to 2011, Sheila Bair said the “revolving door,” which creates lucrative private sector opportunities for government officials after they leave office, should be closed to those who regulate banks.
Well, Bair has spun her own way into just such an opportunity, joining the board of a Spanish bank that has substantial holdings in the United States.
Banco Santander is based in Madrid, but has $50 billion in deposits and more than 700 branches in the U.S. Its American division is supervised by the FDIC “in a back-up capacity,” according to The New York Times.
Santander also owns a bank in Puerto Rico that is regulated by the FDIC.
Bair told the Times in an email that she will serve as “an independent director” whose responsibilities “will be to help identify risks and strengthen the group’s operations.”
“I respect the way Santander successfully navigated through the financial crisis by sticking to a more traditional banking business model, as well as their ‘subsidiarization’ approach which heavily relies on local organization and strong, local management and governance,” she added.
Bair’s career move flies in the face of her own advice, which she espoused in her book, Bull by the Horns: Fighting to Save Main Street from Wall Street and Wall Street from Itself: “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.”
-Noel Brinkerhoff, Danny Biederman
To Learn More:
Bair, Critic of the Revolving Door, Joins Board of Santander (by William Alden, New York Times)
Finance Gadfly Sheila Bair Takes a Banking Job (by Sheelah Kolhatkar, BloombergBusinessweek)
Sheila Bair Steps Down as Head of FDIC (by Noel Brinkerhoff and David Wallechinsky, AllGov)
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