* ECB needs 770 supervisors for new watchdog by November
* To bring in market experts to strengthen supervision
* Two out of four director generals from private sector
* Lower ECB pay, cooling-off period complicates recruiting
* Concern among ECB staff about integration of experts
By Eva Taylor
FRANKFURT, March 2 German banker Korbinian Ibel
gave up a company car and took a pay cut to seize the chance to
join a new organisation that could play a big role in taking
European integration to the next level.
He has accepted one of the top jobs at a new part of the
European Central Bank in Frankfurt that from November will
police 130 banks in 18 countries across the euro zone, including
Commerzbank, where Ibel worked for five years and was
in charge of risk.
As a former banker, Ibel has the expertise the ECB needs for
its new watchdog, known as the Single Supervisory Mechanism. But
attracting more bankers of his caliber might prove tough given
that the ECB jobs pay less than the finance sector.
The European Union's plan to bring euro zone bank
supervision under one roof at the ECB aims to restore the
region's banks to health after the financial crisis.
The United States got its banks quickly back on track, but
in Europe many banks are weak and still in recovery mode and
wary of lending money needed to drive economic recovery.
Ibel sees his new job as central to efforts to help fix the
banks which could prevent a repeat of the crisis of the last few
years that has hit jobs and growth.
"This is a unique opportunity to shape the future of
Europe," Ibel told Reuters, sitting in his office in Frankfurt's
Japan Tower, a stone's-throw away from the ECB's headquarters. A
few moving boxes still need unpacking.
"What we do will not only have an impact on the European
banking system, but also on the real economy, which will benefit
from safer and stronger banks," he said.
Unifying banking supervision at the ECB is the most
ambitious step towards European integration since the launch of
the single currency 15 years ago.
Hiring the right people from the start is crucial for the
project's success and the ECB is leaning heavily on national
authorities to find the 770 supervisors it needs by November.
Since the financial crisis, which exposed big failings in
regulation, the required skills for effective supervision have
changed, said Julie Dickson, who works at the Financial
Stability Board, which coordinates financial regulation for the
Group of 20 (G20) leading economies.
"These days, there is an expectation that supervisors have
robust discussions with CEOs and boards and they delve into
matters like succession planning at systemically important banks
and they delve into risk culture," Dickson, who chairs the
supervisory intensity and effectiveness group at the FSB, said.
"These are skills that were not abundant in supervisory
agencies some years ago," said Dickson, who is also the head of
Canada's main financial services regulator, the Office of the
Superintendent of Financial Institutions (OSFI).
The ECB has its work cut out finding all the supervisors it
needs by November. There are 200 people already working for the
new watchdog but that is both supervisors and support staff.
As Sabine Lautenschlaeger, vice-chair of the watchdog has
said: "Supervisors don't grow on trees."
HUNDREDS OF APPLICATIONS
The ECB has started filling the empty seats from the top and
is receiving hundreds of applications for the rest.
Ibel, 40 and a father of four, is one of two director
generals that have come from the private sector out of a total
He often fields calls at the weekend from former industry
colleagues, asking about possible jobs, but their enthusiasm
usually fades once lower ranking roles come into play. Though
those are the kind jobs Ibel mainly needs to fill.
His department of 250 staff is the largest of four at the
new watchdog, in charge of a wide range of functions from risk
analysis and crisis management to developing guidelines for
supervisors, defining sanctions and enforcements and handing out
authorisations to banks.
Soon, he will go on a tour around Europe, to meet bankers
and supervisors in Belgium, France, Finland, Austria, Spain,
Italy and the Netherlands, building relationships and keeping an
eye out for those he would like to bring on board.
The pay for supervisors at the ECB watchdog normally starts
at around 55,000 euros per year and can go up to about 120,000
euros, depending on expertise. ECB staff also get taxed
according to European rates, between 8 and 45 percent, which are
often lower than in EU member states.
Average pay at Deutsche Bank, for example, was
$169,500 last year and at Swiss bank UBS $380,000.
The ECB is also developing procedures to ensure that any job
a supervisor takes during a period of up to two years after
leaving the ECB will not lead to a conflict of interest with the
work of the bank watchdog.
"WILL THEY EAT US, OR WILL WE EAT THEM?"
But for Ibel, it was not about the pay, but about influence.
Having been on the receiving end of supervision throughout
his career at Accenture, Boston Consulting, Deutsche Bank and
Commerzbank, which taught him the industry short-cuts to deal
with regulation, he now wants to use his knowledge to sharpen
"I will put more focus on material risks," Ibel said.
For example, instead of asking banks in questionnaires how
large their staff bonuses were, it would make more sense to ask
how many people had got a large bonus in spite of missing their
A mixture of career supervisors and bankers from the private
sector could be a powerful combination for the new watchdog. But
they need to be put together with great care, Dickson said.
"Integrating people from the private sector with career
supervisors is also important and something you need to pay
attention to, because they can be different, there can be
cultural issues," she said.
At Britain's Financial Services Authority (FSA), replaced in
2013 after 12 years by a new regulatory regime, such a clash of
cultures became evident.
"There was a tension between the public sector culture and
the City culture," a former senior FSA executive said, referring
to the City of London finance centre.
At the ECB, there is some unease among staff about newcomers
from the private sector.
"Will they eat us, or will we eat them?" one central bank
As for Ibel, he said his career had prepared him for a lot,
having been co-head of treasury at Commerzbank when U.S.
investment bank Lehman collapsed or when managing Commerzbank's
Ukraine Bank Forum that fell victim to a crisis in emerging
"What I haven't been prepared for is a public authority,"
Ibel said. "But I'm willing to learn."