In the wake of the global financial crisis, there is a consensus that the world needs good regulators to ensure that the financial sector serves society in the way that it should and does not wreak havoc. But it is not an easy task: regulators need to be smart enough to understand the market’s complexities and not be captured by its easy nostrums, devoted enough to public service that they accept earning a pittance compared with what someone of their talents could make in the private sector, strong enough to resist the lobbying pressures from the financial sector, honest enough to resist its enticements and politically astute enough to manage a politics charged with money. Hong Kong has been lucky to have such a regulator in the form of Andrew Sheng, who served as deputy chief executive of its monetary authority. And China has been lucky enough to have him as the chief adviser to its Banking Regulatory Commission. Other countries would have done well if they had a person of Sheng’s caliber in similar positions of influence.
I first met Sheng, a devoted international public servant originally from Borneo, when he was at the World Bank. As much as anyone else, his deep insights into the financial sector helped me understand why East Asia markets were crucial to the region’s extraordinary success. Now, as president of the Fung Global Institute, Sheng helps the world understand what is arguably the biggest economic challenge of our era: the rebalancing of the global economy and what has to be done, especially within financial markets, to ensure economic stability and shared prosperity.
Stiglitz is a Nobel Prize–winning economist and professor at Columbia University
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