Yesterday saw the announcement that Sheila C. Bair, a former head of the Federal Deposit Insurance Corporation (FDIC), is set to join the board of Spanish bank Banco Santander, S.A. (ADR) (NYSE:SAN) (MCE:SAN).
Sheila Bair’s revolving door opposition
Ms. Bair, in addition to heading the FDIC during the financial crisis, was an outspoken critic of the so called “revolving door” policy that allows former regulators to later join the firms they were charged with overseeing.
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She argued, vehemently, against a culture of working on both sides of the system.
“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,” she wrote in her book, Bull by the Horns: Fighting to Save Main Street from Wall Street and Wall Street from Itself.
“There should be a lifetime ban on regulators working for financial institutions they have regulated,” she wrote.
Bair is a senior adviser to the Pew Charitable Trusts, a nonprofit public policy organization where she still works to end the “revolving door” policy among other her other pursuits.
While based in Spain, Banco Santander, S.A. (ADR) (NYSE:SAN) (MCE:SAN) does extensive business in the United States with 705 branches throughout the country and an additional bank in Puerto Rico accounting for around $50 billion in deposits. Those banks are supervised by the FDIC in a back-up capacity.
Joining the Madrid Board
Despite this, Ms. Bair is joining the board of the Madrid parent, which is regulated by the Bank of Spain. Presumably, Bair’s experience with the FDIC won’t wane simply because she will attend meetings in Madrid.
“As an independent director my role will be to help identify risks and strengthen the group’s operations,” Ms. Bair said in an email statement. “I respect the way Banco Santander, S.A. (ADR) (NYSE:SAN) (MCE:SAN) 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.”
Bair will replace Terence Burns, a former British official who served for over 10 years on the board.
“I hope that my service on the Banco Santander, S.A. (ADR) (NYSE:SAN) (MCE:SAN) board will provide yet another avenue for continuing my commitment to reforming the global financial system and contributing to a safer, more responsible and customer-oriented banking system,” Ms. Bair said.
No word was given as to what Bair’s board position would be nor was her compensation.