Tag: Regulation
What Bob Diamond really tells us about the city
Investment banks have declined, while investment bankers have grown in power, influence – and remuneration. This is perhaps the most startling of the many consequences of Big Bang.
Treasury Committee
On the 18th October John gave evidence to the Treasury Committee on the proposals put forward in the Independent Banking Commission's Final Report. Also in attendance were John...
Don’t listen to the lobbyists: they never go away
Since there are many issues in public debate, attention to any one is necessarily transient. The attention of vested interests to their own concerns, however, is permanent.
Taming the banks: long overdue or utter folly?
The jobs and growth the bankers claim will be in jeopardy are their own: the pressing needs of the real economy point not to delaying change, but to implementing it as speedily as possible.
A good crisis gone to waste
The turmoil following the collapse of Lehman Brothers three years ago was an opportunity to
reform the world’s financial system. It was missed, and the new crisis promises little change.
A flawed approach to better consumer protection
It is more effective to give incentives to serve consumers well than to supervise the way in which they are served.
The Kay Review of UK equity markets
On the 22nd June the Secretary of State for Business, Vince Cable, announced a review that will examine investment in UK equity markets and...
Why banks’ ringfences risk being Chinese walls
The core problem is that banks have no intention of abiding by the spirit, rather than the letter, of any regulatory rules.
Should We Have ‘Narrow Banking’?
The credit crunch of 2007–8 was the direct and indirect result of losses incurred by major financial services companies in speculative trading in wholesale financial markets. The largest source of systemic risk was within individual financial institutions themselves. The capital requirements regime imposed by the Basel agreements both contributed to the problem and magnified the damage inflicted on the real economy after the problem emerged. This chapter argues that regulatory reform should emphasize systemic resilience and robustness, not more detailed behavioural prescriptions. It favours functional separation of financial services architecture, with particular emphasis on narrow banking—tight restriction of the scope and activities of deposit-taking institutions.
Narrow Banking
The best way to make the financial system more robust to the inevitable shock and failures is to restore elements of the functional separation...
