Saturday 27 November 2010

Standard's Slipping - Again

CU has had cause to chastise the Evening Standard for its poor financial reportage; and I return for a spot of R&R to find therein a piece of complete (and possibly libellous) fiction, penned by one Nick Goodway, who is berating Clare Spottiswoode for her performance as Chair of the Independent Commission on Banking.

"This is the same Spottiswoode who was head of the regulator Ofgem when British Energy virtually went bust"

Errr, no. Such a short sentence, and so little truth. Spottiswoode was never head of Ofgem. At the time when BE went under (2002), she was the newly-appointed non-exec Deputy Chairman of BE itself. Far from the implied role in its demise, she was in fact one of the players who helped clean up the mess. For the avoidance of doubt, she is not my aunt or anything ... I just don't like outright nonsense polluting the airwaves.

That said, it isn't wrong to be keeping an eye on La Spotti and her Commission over the coming months. Her track record as a regulator (Ofgas 1993-98, by the way) was one of enthusiastic free-market rhetoric at the macro level, and rather depressing regulatory capture by British Gas at the detailed level, where much of the action always is. She could never quite believe that polite men in smart suits could be lying through their teeth to her.

Having the right instincts is fine as far as it goes, but will she be a match for smooth bankster-lobbyists when it comes to the all-important nitty-gritty ? She relied heavily on others to do that stuff for her at Ofgem, and it is to be earnestly hoped the Commission is properly staffed.

We shall see.



Budgie said...

I reiterate what is not popular here - the banks operating in the UK should be broken up. Banks that insist on a merchant element should have prominent warnings to their customers that their deposits are not covered by the taxpayer.

In particular HBoS should be wrested from Lloyds. It was yet another of Gordon Brown's bad decisions. That hurt Lloyds and cost us taxpayers the same.

Also RBS should be broken up - it was the ugly love-child of two arrogant bullying men - Brown and Goodwin, and is a millstone for the taxpayer and has reduced bank competition.

Nick Drew said...

what is not popular here - the banks operating in the UK should be broken up

don't think you'll find much opposition here, actually Budgie, we have often said something broadly similar

actual breaking-up might not be needed, but certainly (as I've said before) ring-fencing the ops of merchant division from the retail, to ensure no cross-subsidy / cross-capitalisation should be the minimum requirement

& if it can't be done, break'em up