socio-legal studies association conference March 16, 2008
Posted by Bradley in : Uncategorized , comments closedThis week I’m going to the SLSA conference this week, in my hometown, Manchester. I’ll be talking about the paper I am working on (slides here) which looks at Wells Fargo’s Stagecoach Island as a vehicle for financial education.
britishness defined: monolingualism March 15, 2008
Posted by Bradley in : Uncategorized , comments closedOdd to see via the BBC that Cambridge University is to stop requiring applicants to have a language GCSE when the EU (of which the UK is still a member) institutions insist on multilingualism. Cambridge decided that:
having a formal entry requirement that at least half of all GCSE students are unable to meet “was not acceptable in the context of Cambridge’s commitment to widening participation and access”.
As a practical matter English will take you a long way, but still …
reactions to pwg recommendations March 14, 2008
Posted by Bradley in : Uncategorized , comments closedThe New York Times pans the PWG’s recommendations, pointing out that the recommendations rely on the existing structures and institutions which allowed the financial markets crisis to develop. The editorial ends:
Until the broad statements are backed up by firm detail – and a serious and urgent commitment to regulatory reform – the entire effort is more public relations than policy making.
This is clearly right – the details will matter. But it’s not surprising at multiple levels that the PWG would produce a rather predictable and unambitious set of proposals for financial market regulation at this point. For one reason, policy makers tend to take the view that one of the crucial objectives of financial regulation is maintaining confidence in the financial markets (fraud prevention is often justified by the need to maintain confidence rather than because fraud is inherently a bad thing). Appearing to be acting may be just as useful as acting in this confidence game. Plus there is a huge amount of lobbying energy directed to stopping regulation interfering with the markets – for all of the good and the bad that follows.
consumer protection – eu style March 13, 2008
Posted by Bradley in : Uncategorized , comments closedA Finnish online game, called Galactor, won the European Consumer Campaign of the Year Award. It’s a bit creepy with cockroaches wandering all over the screen. Ireland’s financial regulator won the best financial campaign deisgnation with a campaign that included a (not) scarymoney monster and an ad set on a bus which has produced lots of reenactments shown on youtube. Here’s the original:
And here’s one of the re-enactments:
president's working group on financial markets makes recommendations March 13, 2008
Posted by Bradley in : Uncategorized , comments closedThe President’s Working Group on Financial Markets issued a policy statement on financial market developments which sets out a number of recommendations for financial market regulation moving forward. The recommendations relate to a number of different issues: reforming the mortgage origination process in the United States; encouraging investors to exercise market discipline with respect to securitised credits; reforming credit rating agencies’ ratings processes for structured products; making global financial institutions address risk management issues; and improving prudential regulatory policies.
The mortgage origination recommendations are:
All states should implement strong nationwide licensing standards for mortgage brokers;
Federal and state regulators should strengthen and make consistent government oversight of entities that originate and fund mortgages and otherwise interface with customers in the mortgage origination process. All states should work towards adopting the principles set forth in the guidance developed by the federal regulators for nontraditional and subprime mortgage lending and ensure that effective enforcement mechanisms are in place to deal with noncompliance with such standards; and
The Federal Reserve should issue stronger consumer protection rules and mandate enhanced consumer protection disclosures, including disclosures that would make affordability over the life of the mortgage more transparent and that would facilitate comparison of the terms with those of alternative products. State and federal authorities should coordinate to enforce the rules evenly across all types of mortgage originators.
spitzer resignation March 12, 2008
Posted by Bradley in : Uncategorized , comments closedOver the course of my public life I have insisted, I believe correctly, that people regardless of their position or power take responsibility for their conduct. I can and will ask no less of myself.
But only when caught out……
sec-cftc cooperation March 12, 2008
Posted by Bradley in : Uncategorized , comments closedThe SEC and CFTC announced the signing of a new agreement to cooperate. Both agencies are about to seek comments on two new products based on the streetTracks ® Gold Trust Shares (Gold Shares): an option to be traded on options exchanges, and a future to trade on a single stock futures exchange. SEC Chairman Cox said:
Years ago, when the dividing lines between our agencies’ regulated products were bright, the high level of coordination we are establishing today was not a priority for the U.S. government. But today, the blurring of these distinctions requires the U.S. government to adopt a more coherent and coordinated approach. To this end, we look forward to enhancing our collaborative relationship with the CFTC within the formal framework covered by the agreement.
Although the MOU begins with the regulators’ obligations to protect investors, market users and the public the driver of this move seems to be the need to promote innovation and competition. The addendum to the MOU which addresses novel derivative products contains a number of principles the regulators agree on, including encouraging innovation and competition and legal certainty, described as follows:
Both agencies shall endeavor to make appropriate use of all available authority, including exemptive and interpretive authority, with a view to increasing legal certainty for market participants and encouraging competing or complementary products to be brought to market expeditiously.
For some reason the SEC has begun to include links to videos in its press releases (the links appear as images on the press release page) and below the video image is a picture reached through a link which states Photo for Print Publications. It’s not a particularly good picture – governmental acts don’t tend to make very good pictures, let alone video. The CFTC press release includes links to pictures too, but it also has some much meatier links, including one to the MOU, another to the addendum, and another to the CFTC’s proposed exemptive order. The SEC’s press release emphasizes the video rather than the meat. So the coordination between the two regulators doesn’t extend to management of public relations.
more britishness March 11, 2008
Posted by Bradley in : Uncategorized , comments closedLord Goldsmith published his report on citizenship today. He suggests that Britain needs a national day by 2012, and wants to make permanent residents in Britain acquire citizenship:
Permanent residents are people who have lived in the UK for a long period of time and shown an intention to settle here. They pay taxes; and often contribute to society in a range of other ways as well. Hence it is fair that they should have access to certain rights and entitlements.
..However, given that they have made a commitment to the UK and that they are entitled to certain rights and entitlements in return, it is important to consider whether they ought to be citizens. Citizenship is the closest form of political and social connection between people who live together in a society and it should not be commonplace for people to live in a society for a very long time without becoming a part of that society and taking on their social responsibilities as citizens.
..Hence I propose that government should give consideration to moving towards a system of rules whereby people who have come to the UK either have limited leave to be here or they have to apply to become citizens. Our system for allowing people to access citizenship should be rigorous but it should also make a clear distinction between people who are temporary residents and people who are here permanently — and hence people who ought to share in a common sense of belonging, with the rights and responsibilities that go along with that.
..What I am proposing in effect is a move towards abolishing the status of permanent resident and making a clear distinction between non-citizens and citizens. This includes providing people who are committed to settling in the UK — and have the right to do so — with a compelling route to citizenship.
He also writes:
The rules for gaining citizenship should be rigorous but there is no advantage to having people, who have lived in society for over a decade, deciding not to become a part of it in the fullest sense by seeking citizenship.
I’m one of these problematic people in another place, but I don’t really understand why it is such a problem. People can be productive and useful members of a society without being citizens. And decisions about where to live may be complex and not have simple answers.
cesr and consumers March 7, 2008
Posted by Bradley in : Uncategorized , comments closedCESR (which thus far has mostly focused its energies on consulting with financial market participants) today announced the publication of a new guide for retail investors on MiFID. The press release states:
The purpose of the guide is to explain, in clear and straightforward language, the new protections retail consumers will experience in buying financial services, following the introduction of this legislation across Europe. As a next step, this guide is expected to be translated into many languages by CESR’s Members, the national securities regulators. This is the first time CESR has developed a guide destined for consumers and it reflects CESR’s strong commitment to increase confidence amongst retail investors.
The guide states that a new consumer-focused website will be available later this year.
Rather oddly, the press release states that the guide’s objective is to increase confidence among retail investors and not to ensure that retail investors know their rights. And the guide is drafted in such a way that an investor would not really know what her rights are in a meaningful way by reading the guide. The guide chooses to be accessible to consumers by omitting the details. In one sense this is obviously necessary, but in another sense it is problematic. This is a perennial problem for those who communicate about complex rules to people who are not used to interacting with complex rules and raises the question whether we’d really be better off trying to make the rules simpler so we could avoid some of these translation issues.
The guide is published today in English and Hungarian and other versions are to follow. I don’t know about the Hungarian version but some of the English in the English version is a bit strange. For example the guide states:
Before providing you with an investment service, your firm is required to categorise you as a Retail
or Professional client. You will normally be categorised as a Retail client, a category which includes the majority of individuals.
I think that are trying to say that most customers will be treated as retail customers, and not that a customer will normally be classified as a retail customer, which suggests that under abnormal conditions she might be classified differently. And the description of the conditions under which a person may be classified as a professional client is unspecific:
Your firm will be able to categorise you as a Professional client only if you meet at least two of
the following conditions:
– you frequently carry out transactions;
– you have a large portfolio;
– you have worked in the field of investment services.
Here I think they would have been better off with more specificity. The directive states:
In the course of the above assessment, as a minimum, two of the following criteria should be satisfied:
– the client has carried out transactions, in significant size, on the relevant market at an average frequency of 10 per quarter over the previous four quarters,
– the size of the client’s financial instrument portfolio, defined as including cash deposits and financial
instruments exceeds EUR 500 000,
– the client works or has worked in the financial sector for at least one year in a professional position, which
requires knowledge of the transactions or services envisaged.
Does the vagueness of the guide really help the consumer to understand her rights. And even within the articulated aims of the document, which formulation would be more likely to enhance the consumer’s confidence?
gender equality March 6, 2008
Posted by Bradley in : Uncategorized , comments closedAt the same time that the media notice (again) Norway’s moves on creating (almost) equal representation for women on corporate boards, and just before International Women’s Day (8th March, 2008), the EU publishes data showing that:
even if the European Union’s efforts to increase women’s participation in decision-making have been consistent and certain progress has been achieved, women are still under-represented in all spheres of power in most Member States and in the EU Institutions.