Thursday, 9 July 2009
"Reforming the Markets": Still Craven After All These Years
Yesterday the Government’s “Reforming Financial Markets” dropped on the virtual mat, and what a waste of electrons it is: let us hope they don’t physically print too many copies. The introductory parts are so blinkered, complacent and self-serving that we must assume Brown wrote them himself. It’s all there, complete with typos and grammatical errors, so clearly the Civil Service wasn’t invited, even at the proof-reading stage.
All the heavy lifting on the main issues has already been done by Turner and the FSA back in March: Turner’s review was very much more open, honest, philosophical and academically sound; I feel almost guilty at having criticized it at the time. The Government can do little more than (a) agree with everything he said, but (b) run away from macro-prudential measures (we’ll just get M-P ‘analysis’ instead).
In other highlights, we learn that:
- no part of the crisis was the Government’s fault;
- yup, the blame rests with failure to recognize risk on the part of “market participants …regulators, central banks and many other authorities and commentators” (I always knew it was Peston’s fault);
- “investors … frequently failed to carry out sufficient due diligence” (yes, and Lloyds-TSB comes immediately to mind, eh Victor ? eh, Gordon ?)
- action taken in respect of … wait for it … the Dunfermline Building Society (!) shows how clever Gordon has been;
- “no model of regulation has been successful in fully insulating a country from the current crisis”
So the fact that his crap tri-partite system didn’t work, doesn’t matter. Actually, of course, ‘fully insulating’ is not the test: ‘insulating better’ is the appropriate measure, by which standard there are several more successful systems around the globe.
Conversely, Brown is still fixated with not getting out of step with other regulatory systems: at every turn we find the refrain: “measures can only be effective if implemented on an international basis”.
In short, he is as paranoid about being "outside the mainstream" as ever – which pathetic reason is exactly why the UK is languishing today: the victims of his blind and cowardly rush to the bottom. He seems to like it there.
Posted by Nick Drew