Thursday, September 3

Bank Bosses: The law of unintended consequences

As Bloomberg reports,

Ten percent of candidates for senior management positions at Britain’s biggest financial companies withdrew their applications rather than learn whether they could pass an interview with the nation’s markets regulator.

Reynolds Porter said that some candidates drop out rather than challenge what may be an eventual FSA determination on whether someone is “fit and proper.” Appeals are public and the disclosure might damage a company’s reputation or the ability of the candidate to find another job.

“In the current environment no financial-services company would want to take the risk of being publicly accused of putting forward a supposedly sub-standard candidate,” said Jonathan Davies, a regulatory partner at Reynolds Porter. “There is a concern about just how much arm twisting the FSA is entering into to force companies into dropping their preferred job candidates.”

Now this is a pretty penny. I have further issues with this. If the FSA is actually interviewing candidates, then I am concerned about whether this is an examination driven bar? And why only for British Banks? And quite interestingly, the FSA is hiring a banker to interview other potential bankers for senior leadership positions. Look at the ranks of the FSA and you will find most if not all are also bankers. And what is the test?

The interviews test skills, behaviour, knowledge and expertise, including ethics.

I am really not sure about making all this public is a good idea. You can definitely injure a firm badly, not mentioning the personal injury to the candidate. We all know interviews are not good mechanisms for hiring people. And if I and rest of the world didn't see the damn crisis coming, how on earth will an interview tell you that I am good in managing crisis? weird or what?

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