GLOBAL - The International Monetary Fund has queried whether international pension supervisors pay enough to attract the best people.

"Supervisors need to understand the changing forms of financial business, not only in banking but also in insurance, pensions, and securities markets," said IMF deputy managing director Agustín Carstens.

He said: "All these added supervisory responsibilities and the need to qualitatively upgrade supervision imply the need for more and better staff.

"Are supervisors being adequately funded to attract such staff? We have found that in many countries this is probably not the case."

He was speaking on ‘Opportunities and Challenges for Banks and Supervisors in an Internationalized Financial System' at a bank supervisors' conference in Mexico yesterday.

He spoke of the difficult questions surrounding the "globalization of supervision".

Rapid change in the markets and new products needed to be balanced "with stabilizing factors of reliable infrastructure and effective oversight".
"While you can change the form and distribution of risk, move it around and slice and dice it into very small pieces, you cannot make it disappear," he told delegates.

He noted that risk, traditionally located in banks, is being offloaded to "other investors" - who "are frequently unregulated, and possibly less capable of assessing and pricing risk".

"Thus, the risks become less visible to the supervisor and more difficult to contain."