FINANCE MINISTER Brian Lenihan has decided to appoint a new financial regulator from outside the country, with headhunters appointed by the government recently contacting candidates from Canada, the country regarded as having the strongest financial regulation in the world.
The new director will serve under recently-appointed Central Bank governor Patrick Honohan and will oversee regulatory risk, markets and financial institutions.
Sources with direct knowledge of the headhunting process told the Sunday Tribune the assistant superintendent of Canada's financial regulator, Ted Price, was the most likely candidate. But Price said through a spokesman he had not been in contact with officials in Ireland or with London headhunting firm Spencer Stuart, which is conducting the search.
However, it is understood the Department of Finance has been interviewing candidates from Canada as well as other jurisdictions. Sources involved in the selection said the pool of applicants includes candidates who were approached by the government as well as some who responded to notices in the Financial Times.
Honohan will be starting his job as the new Central Bank Governor tomorrow with three of the four senior Irish regulatory jobs either filled or at an advanced stage of being hired even before he gets his feet under the table at the Dame Street offices.
The government has made no secret of its intention to adopt Canadian financial regulatory practices and structures. The remodeled Central Bank, which brings regulation and financial stability back together under one roof, is understood to be influenced by the Canadian set-up.
I was very glad to hear Patrick Honohan being named as our new head of the Central Bank of Ireland and the new Central Bank of Ireland Commission assuming the government sticks to that name. Professor Honohan was my tip for the role of the Governor of the CBI although his name was also mentioned for the role of the Director Financial Supervision (DFS) at the CBIC (i.e. the new role effectively left open by the early retirement of Patrick Neary as CEO of the Financial Regulator).
So where does this leave us in guessing who might be appointed to this open role? Brian Cowen stated last week (Thur 17/09/2009) that the new DFS will be announced shortly. Even should the government find a suitable candidate will (a) the person want the role and (b) if the answer to (a) is yes, will the structure of the appointment and the money on offer be sufficient?
(a) Possible Contenders:
Turning to point (a) my personal favourite, Philip Thorpe, is not in the race. Like Ted Price from the Canadian OFSI mentioned in today's article (Sunday Tribune 27/09/2009), Mr Thorpe who runs the Qatar Financial Centre Regulatory Authority is a dab hand at establishing new regulators. Apparently he has not been contacted by the Irish government. This speaks more of the search than the individual. I first met Philip when I joined IMRO (in 1997) the precursor to the UK FSA. Thorpe was the CEO of IMRO and probably the most effective UK regulator of the bunch that formed the FSA. When we moved over to the FSA, Thorpe took on the role of managing director. He moved over to Dubai and set up its FSA before heading over to Qatar to establishes its regulator. Just last week he snapped up Michael Ryan from Dublin (formerly Bank of America) to be his deputy. From Canada, other regulators in the running should be Gary Walker, Mark White or the head of the Canadian regulator, Julie Dickson.
Any Irish names?
Some Irish names which should be considered are:
*Willie Slattery (State Street Ireland) but the fact he is a former regulator and Irish based might work against him for the wrong reasons.
*John Fingleton, head of the UK Office of Fair Trading and former head of Irish Competition Authority. Given the fact that John Fingleton has be outside of Ireland during the current debacle puts him in a strong position. He should be actively considered as he has proven himself an effective regulator taken on the banks in the UK well before the economic crises.
* Ann Fitzgerald, Chief Executive of the National Consumer Agency. Anne has her supporters and detractors, but the detractors usually focus upon attacking the NCA without appreciating its financial constraints.
* Wrong or right, it is highly likely that the role of DFS should not go to an internal candidate at the Financial Regulator.
END OF PART 1