private sector response to financial market issues March 4, 2008
Posted by Bradley in : Uncategorized , comments closedVia the FT:
Leading investment bankers are proposing new guidelines on pay and bonuses in the financial sector as they seek to head off a growing political backlash against what were seen as excessive rewards for bankers whose risk-taking helped cause the credit crunch.
In particular, the Institute of International Finance, a global association of banks, is seeking to create a code of best practice, which would discourage banks from giving incentives to traders to take excessively risky bets while failing to censure them if these turn sour.
money guidance March 3, 2008
Posted by Bradley in : Uncategorized , comments closedThe Thoresen Review of Generic Financial Advice Final Report was published today, and welcomed by the FSA. The responses to the interim review and call for evidence are not available on the Treasury’s website until the end of the month and 16 of the responses to the call for evidence are described as confidential (we don’t even know who made them). Some of the responses are available elsewhere: for example, the Financial Services Forum has published its response, as has the NAPF.
The Report recommends the establishment of a national Money Guidance service:
Money Guidance will provide information and guidance to people on a range of financial topics, from jargon busting to long-term saving. “Generalist”accredited partners will provide guidance on a full range of Money Guidance topics to a consistent level; “specialist”accredited partners provide in-depth Money Guidance on a specific topic such as pensions.
Money Guidance will guide the user to the point where they can chose between a small number of options, and where they also understand the consequences of doing nothing.
Money Guidance will refer individuals to external services, whether in the financial services sector, Government or the third sector, depending on the needs of the individual. This includes referring people to regulated advisers or a crisis debt agency.
Money Guidance will not make recommendations to buy, surrender or change a specific product from a specific provider.
conferences February 27, 2008
Posted by Bradley in : Uncategorized , comments closedI’m going to New York this week for the Fordham conference on Fifty Years of European Community Law. I’ll be talking about my paper on Consumers of Financial Services and Multi-level Regulation in the European Union. Unfortunately I’ll be missing the UM International and Comparative Law Review’s symposium on Immigration Law & Policy this Saturday. If only I could figure out how to be in two places at once!
more on gambling February 25, 2008
Posted by Bradley in : Uncategorized , comments closedRecent regulations under the UK’s Gambling Act 2005 have the effect that:
any place which is regulated by the gambling laws of Tasmania will be able to advertise their remote gambling services in the United Kingdom without committing an offence under the Act.
They do this by treating Tasmania as if it were an EEA (European Economic Area) state. Tasmania is very far from any of the actual EEA states.
manchester news February 25, 2008
Posted by Bradley in : Uncategorized , comments closedVia the Guardian:
The government is to offer multimillion pound regeneration packages to Manchester and Blackpool today to make up for the decision not to grant a supercasino licence to either city.
Ministers will soften the impact of Gordon Brown’s “big moral decision” with a series of measures, including a £10m boost for Manchester’s Sports City, the one-time planned site for the casino. They are also expected to announce that 4,000 jobs will be created by extending until 2014 the life of the urban regeneration company New East Manchester, which was due to close shortly.
A higher education initiative, including a campus boosting the number of students in the city, is also on the cards.
Ministerial sources hope the package will be sufficient to prevent the Labour-controlled Manchester city council seeking a judicial review of the decision not to go ahead with the supercasino in Beswick, one of its most rundown areas.
I’d rather have 4000 jobs than a supercasino myself.
good question in european parliament February 21, 2008
Posted by Bradley in : Uncategorized , comments closedI’m not sure why it took so long, but they are asking an important question in the EP:
EU mechanisms for blacklisting terrorists need to be revised, as they fail to guarantee respect for fundamental rights and lack democratic scrutiny, said a number of MEPs in the Civil Liberties Committee during a debate on Monday with Council of Europe’s rapporteur on the topic, Dick Marty. The blacklisting system, created in 2001, is used to impose restrictive measures against people or entities suspected of terrorism.
bank of england 1946, northern rock 2008 February 18, 2008
Posted by Bradley in : Uncategorized , comments closedIn 1946, the Bank of England was nationalised by the Labour Government. In 2008, the Labour Government will nationalise Northern Rock (the draft Bill is here). The decision to nationalise Northern Rock is described as being about delivering value for money for the taxpayer, and as being a temporary measure. The Chancellor’s statement describes the decision as follows:
under public ownership the Government will secure the entire proceeds from the future sale of the business in return for bearing the risks in this period of market uncertainty.
Robert Peston argues that shouldering these risks will cost British taxpayers more than £3500 each.
The UK Shareholders Association (UKSA) promised to fight the move,stating:
It seems the only reason that the Government has chosen nationalisation is because “it offers better value to the taxpayers”. This is equivalent to a thief telling you it offers better value to him to steal from you, than to enter into a commercial transaction with you.
Note that the Government has already made it clear that shareholders will receive no compensation for the value of their shares as they have set the terms of reference for an independent valuation to be on the basis that the Government loans have been withdrawn. In that case Northern Rock would clearly not be a going concern and hence would have no value. Why the Chancellor did not make this plain in his statement today is unclear.
Although the Chancellor says that Northern Rock will be operated on a commercial, arm’s length basis, historically nationalised industries in the UK weren’t terribly well managed, and when they were privatised there was usually a windfall to the new owners.
Meanwhile, a nationalised bank will be treated as an emanation of the state for the purposes of European Community law rules – rules of EC law which cannot as a practical matter be enforced against non-state-owned banks in the UK will be enforceable against a nationalised Northern Rock.
nothing new? February 14, 2008
Posted by Bradley in : Uncategorized , comments closedYesterday, Dominique Strauss-Kahn, the Managing Director of the IMF gave a speech in which he focused on the current world financial problems:
The challenges that the Fund and its members face … have changed. In its early years, the crises that our members faced were mostly current account crises. Large scale capital movements between countries were relatively rare, and financial institutions tended to be national rather than international. And transmission of problems from the national to the global level was relatively slow. Obviously that is no longer the case.
..If we look now at the current financial crisis from this perspective we can see that what began as a problem in a single sector in a single economy–the housing market in the United States–has become a global problem. And what was first manifested as a problem for financial institutions is now becoming a problem for economies. This is obviously the case in the United States. I believe that the effects will be felt increasingly in Europe. And I do not think the emerging economies are immune from this crisis.
.. The lesson I draw from this is that we have to look for both the causes and the cures of crises in the interaction of national and global developments and in the interaction of economic and financial market developments.
.. Let me be more specific. The present crisis is the result of a perfect storm: a macroeconomic environment with a prolonged period of low interest rates, high liquidity and low volatility, which led financial institutions to underestimate risks, a breakdown of credit and risk management practices in many financial institutions, and shortcomings in financial regulation and supervision.
How new is all this? An acceleration or magnification, but not essentially really new. What is different is the enormous amount of energy that has been dedicated (apparently not too successfully) to ensuring financial stability through regulation in recent years. More than half a century ago, Karl Polanyi wrote:
By the fourth quarter of the nineteenth century, world commodity prices were the central reality in the lives of millions of Continental peasants; the repercussions of the London money market were daily noted by businessmen all over the world; and governments discussed plans for the future in light of the situation on the world capital markets. Only a madman would have doubted that the international economic system was the axis of the material existence of the race.
consultation manchester style February 14, 2008
Posted by Bradley in : Uncategorized , comments closedHow can decision-makers get useful feedback from the people they answer to? This story about my hometown’s response to an invitation to express views about spending priorities from the BBC, is a bit depressing:
A hotline for people in Manchester to offer suggestions on how the council should spend its £468m budget received one phone call in a month.
Thousands of leaflets were sent out to residents with a phone number, e-mail and postal address.
In addition to the solitary call, the city council received six letters and 21 e-mails in the month-long exercise.
Council bosses admitted disappointment at the response but said it was still an important consultation.
About 2,000 copies of a leaflet with contact information were printed and sent to community centres and libraries between Christmas and New Year.
Probably not the best time to send out the leaflets, while people were worrying about how they would pay all of the seasonal bills, but still….
odd press release headlines February 12, 2008
Posted by Bradley in : Uncategorized , comments closedOn Safer Internet Day, the EU Commission published a press release with the headline “Let’s listen to children: They know how to make the Internet a safer place!” It seems that talking to children is only part of the story – really they will be talking to adults too. But given the hysteria about children and the internet, what an odd headline that is.