Is Singapore-Hong Kong Financial Regulation Superior?

Howard Davies

Writing on the subject of banker bonuses and financial regulation, Howard Davies, the Director of the London School of Economics (LSE) and former head of Britain's financial regulatory body, sings the praises of both Hong Kong's and Singapore's higher compensation for financial regulators.

Could simply paying regulators more be the key to solving the problem of regulatory capture?

Davies also highlights the research of LSE's Ahmed Tahoun, who found unsurprising evidence that "US congressmen systematically invest more in firms that favor their own party, and that when they sell stock, firms stop contributing to their campaigns. Moreover, firms with more stock ownership by politicians tend to win more and bigger government contracts...the results...suggest a less-than-healthy relationship between lawmakers’ political and pecuniary interests."