The weekend FT ran an article entitled Regulator-friendly bankers scale new heights, by Laura Noonan and Martin Arnold. The article discusses the recent choices of Bill Winters for the CEO slot at Standard Chartered Bank and Sir Howard Davies (in the seat of the chair at RBS) as good examples of careful stewards succeeding banking buccaneers - also as being "regulatory-friendly". We must tread carefully with such statements. I think this is a generalisation which really doesn't capture the breadth of skill sets that these individuals will be required to display in leading big, complex banks.
I am not questioning the choice of these two professionals in their new roles. If anything, I welcome the experience and vision of both leaders. I also take on board the fact that both are likely to be better survivors in the new "regulatory-centric" world we now live in.
My concerns are more linked to any suggestion that the personal quality of being regulatory-friendly, in itself, should be seen as the key driver for selection. Surely a broader set of skills is a pre-requisite today. I am reminded of two examples. Chuck Prince, the ex-Chairman and CEO of Citigroup, who presided over the group in the post Sandy Weill era, was seen as being "handpicked to guide Citi through difficult regulatory and legal waters". Certainly, as a lawyer, he knew his way around legal and thorny regulatory issues. Unfortunately, probably Weill himself would now agree that Prince did not have the right skills in hindsight to lead a big bank. On the other hand, there are great leaders that were not necessarily known as being "regulator friendly", perhaps such as the late Robert Benmosche, who reportedly "chaffed at government oversight of AIG". Sadly, Mr Benmosche passed away on Thursday and will be missed in financial services as a combative and provocative, but effective professional. Good luck to Mr Winters and Mr Davies in their new roles and broad set of challenges they will face at the helm of major banks.
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