A crisis in regulatory recruitment

Editorial Letter

I've heard this same tale at least four times in the past six months. I expect many of Operational Risk's readers, at one time or another, have been approached by their nation's regulators. But most choose to stay put at their banks, insurance companies or asset management firms. Said my lunch companion, "I told them that in order to attract the kind of talent they will need, they have to pay market rates."

So how will the world's regulators attract the talent they need? In a blink of an eye, they will be expected to start validating advanced measurement approach models for op risk. This isn't easy stuff to do – the industry is still struggling over how to put these models together. If regulators can't come up with credible opinions on them, trouble will start to brew.

Governments are going to have to seriously think about how they can attract the talent they need to work within their regulatory agencies. Or they will risk losing the respect of those firms that they supervise.