Financial Sector Regulation and the Revolving Door in US Commercial Banks

IntroductionThe "revolving door" is a practice quite widely in use in the United States, in which heads of state agencies, after completing their bureaucratic terms, are entering the very sector they have regulated. This phenomenon is also frequent in France, where it is coined "pantouflage", and in Japan, coined "amakudari" (descent from heaven). Research conducted and data collected by the research group Corporate Europe Observatory strongly suggest that this process is also significant within EU institutions.[1]In the last two decades, the revolving door and the intertwining relations between governments and private groups have intensified. The revolving door became so widespread in the financial sector that it has been pointed out by the OECD (2009) and NGO's (Transparency International-UK, 2011) as a major cause of the 2008 financial crisis. In its 2009 report on the revolving door and the financial crisis, the OECD therefore stressed the necessity to set appropriate rules and procedures to control conflicts of interest generated by this phenomenon (OECD, 2009).[2]The revolving door affects the economy through two main channels: a positive one as well as a negative one. On the one hand, this movement of individuals between the public and private sectors may lead to some positive effects and can be desirable. Indeed, the revolving door allows recruiting qualified bureaucrats, and the knowledge the bureaucrat has accumulated while working in the public sector is put in use in their future position. .../... [1] See http://corporateeurope.org/revolvingdoorwatch.[2] See also www.opensecrets.org. on the revolving door inside the US financial sector. See also Transparency International-UK (2011) and Transparency International (2010), which lay down the negative as well as positive effects of the Revolving door

The demand for transparency: An empirical note

Corruption, EITI, Natural resources, Reform, Transparency, F13, F53, H77, O19, Q32, Q38,

How will good economic policy environments emerge in Africa?

In Africa, institutions were not established at independence that took proper account of the pluralism of the societies, while civil society failed to press for institutions to control the state. Political leaders have had little self-interest in pursuing good economic policies, and there is weak civil societal demand for such policies. Foreign aid and the proposed peer review mechanism of the African Union could help strengthen this demand. Social scientists can help by focusing on corruption in top political leadership, reducing ethnicity, and improving political leadership. Selectivity for aid can be ex ante, with resoluteness in withdrawing aid for not keeping promises.Africa, Policy reform, Economic policy environment, JEL Codes: D70, H11, 055,